Let’s take a second listen to this interview with Dr. Tom Lee that originally aired last summer but listen to it this time within the context first of how primary care can or should reduce ER visits and also downstream specialty spend et cetera, which is one of the through lines that I, along with you lot, have been exploring a lot this past year.
For a full transcript of this episode, click here.
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And much of this conversation is about how primary care can survive in these unfavorable times where CMS (Centers for Medicare & Medicaid Services) and commercial carriers complain about the rates that they have to pay consolidated entities with market power, consolidated health systems, but then they actively underpay indie practices.
That is very illogical, I’d say, at a fundamental level. It’s not tricky math. Do not force out of business your potential best partners and then wonder why you have so few of them left. Dan O’Neill was talking about this on LinkedIn the other day.
So, that is one context to kind of listen to: How does primary care survive? But then also listen to this show in the context of my latest tear, which is this mission versus margin tear.
Some of the same themes come up as in the show with, for example, Ben Schwartz, MD, MBA, from last week (EP481). How do you ensure that if you want to achieve scale, and you can only achieve scale when you take professional capital from private equity or VCs (venture capital) or even a consolidated health system with a venture fund or an innovation studio, how do you take their money but not wind up with some board member sitting at the conference room table talking about a mission like, you know, Jeff Bezos’s where he said, “My mission is other people’s margin”? How do you tow that line?
Rushika Fernandopulle, MD, talked about this a little bit, too—that you need money to scale but, once you get money, it’s easy for mission to get kicked off the bus.
Today I am talking with Tom X. Lee, MD, who has a long history in primary care. He founded One Medical and then also, most recently, Galileo. Dr. Lee also was a founder at Epocrates (tossing that in for context).
I wanted to talk with Dr. Lee because so many RHV (Relentless Health Value) listeners are trying to figure out how to sustain primary care as a stand-alone entity when most primary care docs these days are employees of health systems. And that makes sense because these days, the most obvious and most common way to make enough money in primary care is to drive and maximize the dollars from downstream volume of high-priced service lines, which, if you think about it, undermines the entire point of primary care but is also a really good motivation for a consolidated health system to purchase all of the primary care docs in the area.
I’m starting to call this the paradox of primary care because when you begin seeing the promise of primary care have to erode if you’re gonna stay in the business of primary care, then yeah, it’s sort of a paradox. Said another way, if you do primary care really well and use evidence-based preventative care to curb the need for excess specialty care (ie, you reduce specialty revenue through primary care), now you’re asking specialty (high-profit health system service lines, that is) to not only make less money but use the remaining money to pay for primary care, which is the entity that is reducing its revenue.
So, again, I am hereby coining the term the paradox of primary care to express the conundrum for why a consolidated entity that knows where its bread is buttered is going to do much, if anything, to empower primary care with the technology and the staff and the time, which, if it goes well, is going to cannibalize its own major source of revenue.
Meanwhile, if you choose not to participate in this paradox within the context of a consolidated entity, it’s kinda hard to stand up a pure play primary care practice. And I’ve heard this so many times, most recently from Paul Buehrens, MD, who said, he wrote on LinkedIn, “My own primary care clinic lasted independent from 1946-2017, and when costs were rising faster than reimbursement with no alternatives available, we sought out purchase by our hospital, giving up on trying to stay independent. … Consolidation is not driven by bad actors nor by quality nor volume savings, but by the bizarre economics of healthcare as a highly regulated but hardly rational market.”
I simply don’t get why knowing as much as we know about the importance of primary care, CMS and others continue to follow RUC (Relative Value Scale Update Committee) guidance on PCP (primary care provider) rates.
How much power must be wielded by the AMA (American Medical Association) or the AHA (American Hospital Association) or who knows? I don’t know the half of it, admittedly. Listen to episode 437 with Brian Klepper, PhD, for more on just the RUC. Also, despite again all of the lip service about the importance of primary care, our current cohort of payers seems to have a thing going where they do not offer value-based care (VBC) contracts to the primary care folks who seem most likely to succeed. Add to that the moving goalposts for ACOs (accountable care organizations) and the lack of available data to even know how you’re doing, and yeah, here we are.
So, again, the question is how to sustain primary care without falling into a paradox. That is the hard question that I asked Dr. Tom X. Lee today. I asked Dr. Lee flat out what it takes to stand up a stand-alone entity doing primary care, and he said enlightened leadership with a value mindset combined with big-time chops in service operations.
I, of course, asked, what does enlightened leadership and mad skills in service ops mean exactly and specifically? Dr. Lee broke this down. Part of it, he said, is finding an eliminated hidden waste, which, according to Dr. Lee, does exist in primary care, although maybe in a thinner layer than elsewhere. And trust me, I asked Dr. Lee what is this waste exactly and specifically of which he speaks. Turns out, a lot of it is cutting out busywork (like clicking 90 times to order a Tylenol) or dumb paperwork or doctors doing stuff that a nurse navigator could do in between visits or the medical assistant could do or technology could just automate.
If you think about wasted time as capital W Waste, then yeah, there’s a hefty amount of waste that could be cut. This also comes up in episode 446 with Spencer Dorn, MD, MPH, MHA.
Now, you know me … you start talking about getting rid of waste, and I am immediately going to ask you how you define value, how you define what you value, because when cutting waste, it’s really easy to cut more than waste. Listen to the show with Kate Wolin, ScD (EP432) or Rik Renard (EP427) or Will Shrank, MD (EP413) for more on that one. So, I get into a proper grilling with Dr. Lee on how he defines value, which leads us to talk about open access as one component of delivering value.
But then, of course, I bring up, yeah, well … access was Walmart and Walgreens’ hypothesis, giving patients access to care, and they will come, and that didn’t work out so well. The rebuttal there is access, sure, but access to what? And good point. Clearly, there was a disconnect between what patients thought good primary care should be and what was on offer.
And around the wheel we go, because again, we’re back to the delta between the promise of primary care and what often exists. Again with the paradox.
Okay … now, just let’s sum this all up here because I really want to get to the interview. The trick to doing a pure play PCP or indie PCP practice without falling into the paradox of primary care is enlightened leadership with a value mindset combined with service operations to find the balance between human centeredness, process, and technology. That’s kind of the big wrap-up of a many-pronged conversation that there is a balance here.
Dr. Lee puts it this way. He’s like, if you think about it as a paradox, you’re kind of creating a binary. What you want to find is the productive middle. Find the productive middle of primary care and you can get rid of the paradox.
Probably some of you are thinking direct primary care/DPC is a solution here and yet, for sure. But to do DPC well, you still have to have enlightened leadership and do a good job with service operations—especially if you’re thinking you want to work with employers or others who are going to measure outcomes.
For a bonus sidebar conversation with Dr. Lee, click here.
Also mentioned in this episode are Galileo; Dan O’Neill; Benjamin Schwartz, MD, MBA; Rushika Fernandopulle, MD; Paul Buehrens, MD; Brian Klepper, PhD; Tom Nash; Spencer Dorn, MD, MPH, MHA; Kate Wolin, ScD; Rik Renard; William Shrank, MD; John Lee, MD; Scott Conard, MD; Patrick Dunn, PhD, MBA; and Shawn Gremminger.
You can learn more at Galileo and follow Dr. Lee on LinkedIn.
Tom X. Lee, MD, is the CEO and visionary behind Galileo—a data-driven, multispecialty care model designed to improve quality and reduce total cost of care. Operating across 50 states and partnered with large employers and health plans, Galileo is one of the fastest-growing innovators in care delivery.
Prior to Galileo, Tom helped build One Medical into the leading, independent primary care system in the country. And previously, he helped launch Epocrates, the #1 mobile app used by clinicians at the point of care.
Tom is a board-certified internist who completed training at Harvard’s Brigham and Women’s Hospital. He received his bachelor’s degree from Yale University, an MD from the University of Washington School of Medicine, and an MBA from Stanford University’s Graduate School of Business.
10:30 What is the paradox of primary care?
12:47 Why is it hard to run an independent primary care practice?
13:29 What are the barriers to running an independent primary care practice?
14:09 Can you have fee for service and value?
15:53 “Value is more about a mindset.”
16:49 What hidden waste is there in a primary care practice?
18:36 What do you need to have a value-focused mindset?
20:41 Why does access precede quality?
22:40 What are the nuances of a service business that make them challenging for managers?
23:27 How do you find the balance between fee for service and value?
30:07 EP438 with John Lee, MD.
31:04 How can you invest in quality without a value-based contract?
33:09 How do you address the trade-off between fee-for-service finances and investing in value-based care?
34:26 Where is the “productive middle”?
35:18 Dr. Tom Lee’s message to payers.
38:45 Dr. Tom Lee’s message for policymakers.
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Dr Benjamin Schwartz, Dr John Lee (Take Two: EP438), Kimberly Carleson, Ann Lewandowski (Summer Shorts), Andreas Mang and Jon Camire (EP479), Justin Leader (Take Two: EP433), Andreas Mang and Jon Camire (EP478), Stacey Richter (EP477), Charles Green (Bonus Episode), Ann Lewandowski, Peter Hayes