David 0:00

Direct primary care is growing because both doctors and patients prefer that model. But it's still growing slowly. Are there new tools and structure on the horizon that will help speed the growth of this practice model? We'll find out on this episode of Shift Shapers.

Announcer 0:18

Change either paralyzes or energizes. The choice is yours. You're listening to the Shift Shapers podcast. You're about to learn firsthand from businesses and entrepreneurs who have successfully shaped the shifts in their industries. Get ready to become the change you want to see. This episode is brought to you by Shift Shaper Strategies. In sales, if you confuse, you lose. Clarify your message so you win more clients, crush your sales goals, and build your practice. Learn more at ShiftShaperStrategies.com. And now, here's your host, Storybrand Certified Guide and Chief Transformation Strategist. At Shift Shaper Strategies, David Staltzman.

David 1:09

As longtime listeners of the podcast will remember, we are huge proponents of primary care. And we have been for many years. Back even before the podcast, when I was writing for life insurance selling and for National Underwriter, we featured stuff on a movement that was just in the very beginning. And, you know, I heard a stat this past week that nearly three-quarters of physician practices are hospital-owned. And I don't know if that's the right number or not, but even if it's close to that, that's pretty scary. And it's scarier still for a lot of physicians because they don't want to be hospital-owned. They don't even necessarily want to practice medicine the way they're practicing medicine. I almost said being forced, but that would probably be too strong to practice medicine. And they would like to escape into more of a direct primary care or an old-fashioned doctor-patient practice. It's probably what they envisioned during med school, but they can't do it. And part of the reason they've had trouble doing it is because there's a lack of tools and a lack of structure out there in the marketplace to help them do that. We're fortunate enough today to be joined by Mark Nolan. Mark is COO at Hint Health, and this is an area that Hint is working in. And we thought we'd learn what's new and exciting in that area because if we see more direct primary care and to more direct care in general, then we're in much better shape as patients and as a country. So with that, welcome, Mark. Thanks for having me. I'm really excited to be with you and talk about this. Thank you. Thank you. So what is the problem in U.S. healthcare on which you guys are focused, in your words, not in mine?

SPEAKER_02 2:38

Sure. I would say we see three of the largest impediments to improving our healthcare system being one, the inappropriate role of insurance, which drives increased cost, two, volume-based fee-for-service payment models, which distort incentives. And three, similar to what you were talking about a moment ago, what is clearly unfortunately a low value and low empowerment in the U.S. of primary care, which we think is a foundation of any good healthcare system.

David 3:13

Yeah, I mean, we know empirically, and this is now without question, we have enough data, that folks who have primary care relationships are much healthier folks in the long run because those practices, I mean, when when medical home, which is the concept that I think it was the American Academy of Pediatrics, came up with now 15 years ago that started this, what we now call direct primary care or direct care, when they came up with this notion, it was because physicians would have a longitudinal relationship with a patient, and because they could keep them, they could spot things early and intervene early and keep folks from getting really, really sick. And you're right. We just we don't have that. Are you seeing the same kind of stats in the data that you're looking at in terms of folks who were without primary care relationships?

SPEAKER_02 3:57

Yeah, you see it both actually in the US and when you compare the U.S. healthcare system to others in terms of how much we invest, how much we spend on primary care, and what the outcomes are. And over the years, we've become more skewed to providers operating or people who want to become doctors and providers moving into more specialty and outside of primary care. And you know, there are reasons for that, there are incentives for that, but the the effect, as you described, is that when you don't have the primary care foundation that you need, you don't necessarily have the access and the relationships you need for primary care. And then suddenly things end up end up needing to be in specialty care because they weren't managed the way they could be well in primary care.

David 4:45

Yeah, and it's a huge cost driver, not to mention the fact that place of service also factors in even in non-emergent situations. And you know, being in a doc's office is a whole heck of a lot less expensive than trundling to the emergency room or even for most people going to urgent care. You have conversations with doctors who are not in these kinds of practices. What are you hearing from them? What's what are their friction points and why are they so eager to get into a kind of practice model that's different than what they've had till now?

SPEAKER_02 5:15

I think that most of them feel like they're in a in a hamster wheel that they can't get out of. And it's based on the incentives of the system, which is they've got to, you know, whatever they went to medical school for and to be a provider, it's going to be essentially subservient to cranking through the volume of patients that they can, because that's the way they get paid, that's the way their employer gets paid. And then on top of that, in order to get paid, they've got to go through an administrative nightmare for documenting things in a way that fits a system that, you know, frankly isn't the one that's best for them and best for the country and best for the patients. And so most of the doctors that we speak to and providers who are who are moving over, you know, they've got a few different reasons for this. You know, one is they're gonna burn out, they just can't take it anymore. Two, they want to have relationships with their patients that you know last longer than the 10 minutes that they get to see them in some sort of episodic scenario versus the longitudinal relationship like you were mentioning. Three, they just want to get paid for the value that they that they can add for the patients, and all those are extremely hard under the current system.

David 6:26

And those are the hard answers, I think. And I we you know, we hear them too. But there are what let's call them soft answers. There's lifestyle and satisfaction involved in this as well. A lot of these folks did not sign into burn insurance patients or to be in practices where it's basically treat and chase. And you know, the docs that I know, my firm pays for a very nice, very generous major medical package for me. But I have a direct primary care doctor that I pay out of my pocket. And there's, you know, there's a reason for that, both from his side. I mean, seeing the doctors who are in those practices is so different than seeing somebody who's in a traditional practice. And the experience for the patient is just completely night and day. And I think that's what a lot of these docs want to be able to deliver on on both sides. You're hearing that as well, I presume.

SPEAKER_02 7:17

Oh, for sure. I mean, when providers move over and doctors move over to direct primary care, I've been in this for quite a while, and unprompted from many different individuals over the years, they've almost said, quote, you know, the same thing, quote unquote, which is this is why I went to medical school. So on the provider side, it's it's pretty stark in terms of the satisfaction that they can get out of it. On the patient side, you know, I spent quite a few years in terms of uh building out a provider practice. And so worked with many patients, frankly, thousands of them through the through the doctors in that practice. And the satisfaction, the the the feedback that that we would receive around how appreciative they were that there was a model that they could go to and doctor they could go to to practice you know, something that that the patient really needed and experienced, or that their employer made accessible to them. It was genuine and it was it was pretty moving.

David 8:15

So for the average physician, what have been the barriers to moving? There are tons of them who are not happy, and they know that there's you know, the grass is greener on the other side of the medical office fence, so to speak. What have been the things that have kept them from making that change?

SPEAKER_02 8:31

I would say the ones that come to mind, number one, just you know, as humans, sometimes change can seem much more daunting than it is, or you're just not sure where to start. So there's it's intimidating. And how do you go get the information, the resources, and learn how to do this in a way that you know minimizes your risk? I think the second one for a lot of them is, you know, I'm a doctor, you know, do I want to be a business person? You know, do I want to own my own practice or or how do I want to do this? And lots of times, you know, that's probably not the right question to ask, either because that can be made easy or you can still operate in this model, but don't have to necessarily own your own practice. You can if you want. I'd say the third thing that occurs to me is, you know, they're thinking, okay, I need to have a panel of patients. How do I, where do I go, where do I start to try to get patients that will, you know, be members of this practice so that it's successful. And it gets back to, you know, I'm a doctor, I never really thought about or went to school to think about how to how to convince patients to come see my, come see me in a practice. And I think there's just there's a lot of intimidation around that, where you know the thousands of doctors that we work with show that you can certainly be successful and very quickly in this model, and there's people out there ready to help you.

David 9:57

Are there certain geographic localities or minimums for potential patient bases that, you know, when you're working with these docs, that that you advise them, you know, you're in too small a town and you're too remote, you can't drive enough patient flow, or is there a better or worse environment for these folks?

SPEAKER_02 10:15

Yeah, you know what? Two years ago, not surprisingly, what in this industry in healthcare you'd call your catchment area, you know, you have to think about how do you have enough patients that can help you drive a successful practice. I still think people probably overestimated the impact of that. I I've worked with doctors in extremely rural areas, and you know, frankly, sadly, um, there's often so few providers out in those rural areas that you know they don't have to think so much about the foot traffic or where they're at because their catchment area, as you will, is large enough to support their practice. I would say most providers, you know, are targeting somewhere, probably you know, between four or seven hundred patients total, and you know, that's across from adults to children, you know, if they're in family practice. And so that's pretty doable, I think, wherever you are. What's more interesting as well, especially we've seen these last 18 months, is you know, the increased um comfort on the patient side of virtual care. And that increases you know that that same catchment area even more, so that thinking about where you're located and foot traffic doesn't have as big as implications as it might have had you know more than two years ago.

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David 12:35

There are a number of variations on the kind of direct primary care practice model. Are you seeing these? First of all, what what are you seeing in terms of those models? And second, are you seeing them geographically located in certain geo areas? Or is it just a question of what the particular physician wants to do?

SPEAKER_02 12:53

I would say geographic isn't one that's really standing out. I mean, clearly things are regulated at the state level. So there are states that have more favorable, less favorable regulations around this, but all in all, they're not so different or so stark that yeah, that's really a geographic driver. And the rural, you know, urban, suburban, again, I wouldn't say that's the main thing. The interesting models that we're seeing starting to develop are, you know, there's virtual first models. So essentially starting out with just a virtual package, if you will, and then they also could offer an in-person sort of augmentation to that. A lot of that has to do, you know, clearly with the pandemic and things going virtual in many ways that they didn't before. I would say there's a lot more focus on working with employers. And so basically the employers are the sponsoring a population of employees and dependents and how that works, whether the practices might have a location on-site at the employer or near site in the community or multiple, that's one that's that's really been taking off, along with you know the traditional one that started here, which was a doctor having a practice focused on retail patients, you know, individuals like you or me coming, walking in off the street and paying for themselves.

David 14:17

Are you finding, especially in the corporate environment, that the doctors need to have systems in place so that for the employers they can show demonstrable repeatable ROI?

SPEAKER_02 14:27

Sometimes it's gonna depend on the employer, the size of the employer. A lot of that might have to do just the size of the population. You need a certain size population just to have a sample, if you will, to be able to run analyses that are that are you know statistically relevant. I would say all corporate employer payers do want certain information, and you do need systems to be able to provide that. So what people are actually eligible, what people are actually enrolling, how much they might be seeing you, you know, utilizing you, what kind of satisfaction are you getting from it, or they're getting from it, I should say. The next level ones like you described around the ROI, hard hard ROI, quality outcomes and how they compare. Lots of times those are needed as the population is large enough. But if your population isn't large enough, you just don't have the statistical relevance to pull that stuff out.

David 15:28

On the employer side, are you seeing employer pay, employer offer, employer cost share or all three of the above? And is any one of those more prominent than the others?

SPEAKER_02 15:37

I would say employer pay is the most prominent one, mainly because the employers who examine this model, they're recognizing that investment in advanced primary care models, they they more than pay for themselves downstream with other impacts on their employees' health. And so to align the incentives, they'll usually bake that into their plan and pay it. Oftentimes they will move into a cost share, depending on you know what the price level is, what their own plan can support, because you are going to have employers of different means, if you will. And so, you know, they're gonna think about different ways. But I would say most of the employers I've I've come across, they're they're covering this because they think it makes sense as an investment in their population.

David 16:27

You mentioned near site. Are employers also using some of these docs in on-site models in the work that you're doing?

SPEAKER_02 16:35

Yes. I would say the on-site model is more common when the doctor's practice is at a larger stage, I would say. Often they are have multiple practices in a geography or throughout the region, and that might include one that's on-site. Most on-site, uh, you know, the ones that you hear about, most on-site are larger practices, and sometimes regional or national in scope. However, I would say that the employers are in some ways, depending on what their business is, you know, they can be even more excited about the near site version than the on-site. Because when you have the near site, not only is it accessible for the employees and it's pretty close and not necessarily sometimes a huge difference between having an on-site depending where it is, but it's also much more accessible for the dependent population. And often for an employer on their plan, the dependents are going to outnumber their employees by you know a ratio of maybe two to one.

David 17:34

Interesting. So, what kind of infrastructure are they missing and what are firms like yours providing for them?

SPEAKER_02 17:41

I would say for most practices, what they're looking for when they want to have this model and have it work right, is the type of software that's gonna make it easy for them. Basically, let them do what you and I were talking about earlier, which is you know, they just get to see the patients. You know, they want to develop those relationships and work with them on their health, you know, why they got into this. And there's things that are needed to enable them to do that, especially as they move into more complicated relationships, as they move into supporting employers, etc. But even if you're just having, you know, a you're moving into a retail membership practice, you need special software, which is among the things that that my company provides, hit, which is enables enrollment, right? Enrollment is not a typical part of primary care or frankly any part of healthcare. You often need to think about eligibility, especially if you're working with employers or something that is uh based on a plan. You have billing and invoicing that is different than the fee for service model that has to run through an insurance company. So there's things of that nature that providers need to practice this type of model. And it's the traditional software, traditional things that were out there for fee for service practices, they just don't suit and they're not tailored for what they're doing.

David 19:10

When you're thinking about enrollment, I know uh actually both of the DPC practices that I've been a part of offer a variety of different packages depending on what the member or the family might need. Does the enrollment stuff include decision support tools as well for them as they're enrolling, or is that something that the office would do with them before they actually enrolled?

SPEAKER_02 19:30

It's gonna depend by the office. So the different offices can have different services. I would say all practices, or just about all of them, are gonna have some foundational pieces, you know, urgent care, primary care, unlimited visits, same-day, next day appointments and availability, immediate rooming, extended visit durations, you know, 24-7 access, things of that nature. Then the practices may layer on things on top of that, decision support. They might have virtual specialty consults, they might, choosing, depending on themselves and maybe their state rules, be able to dispense medications in-house. So there are some things around the edges, if you will, that will depend on the practice. Oftentimes, as they get more mature, as they start to build their practice, they they'll they'll add those things.

David 20:22

Mark, we've got about a minute left. I wonder what you see as the future. What do you see as the trajectory of this move by docs into these kinds of practices?

SPEAKER_02 20:31

I think there's a lot here. I think we're gonna see this more and more. I mean, it's just I've been in this for quite a number of years, and you know, this is one of those things where this is an idea whose time has come, and this is not gonna slow down. I only see it increasing because of the context that it's operating in, the different dynamics that are making it even more difficult to be a provider in today's environment, the consolidation that you mentioned at the top of the show. I just think that the tailwinds behind this are very strong, and especially as you have employers and plant sponsors looking for new things, you know, they're starting to recognize this innovation and how it can help them.

David 21:11

As this grows out, we'd love to have you back, but that's all the time that we have for today. Mark Nolan, Chief Operating Officer at Hint Health. Mark, thanks so much for sharing your experience and your expertise with the audience. Thank you.

Announcer 21:24

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