David 0:00

Today's guest believes that buying health insurance is a lot like renting an apartment. And that's not a good thing. What does she mean? And how would she change things? We'll find out on this episode of Shift Shapers.

SPEAKER_00 0:15

This is the Shift Shapers Podcast, connecting benefits advisors with thought leaders and entrepreneurs who are shaping the shifts in the industry. And now, here's your host, David Saltzman.

David 0:28

And Paula Muto is a practicing surgeon, founder of Uber Docs, which we'll talk about as we go along. In addition to her many professional accomplishments, she's one of a growing number of physicians who are trying desperately to fix our Bass Ackwards healthcare system. And what we're going to be talking about in large is a direct pay model. And for some of you that's new, Will Paula will explain all of that. Welcome, Paula.

SPEAKER_03 0:52

Nice to be here, David. Thank you for having me.

David 0:54

Thanks for being with us. So tell us just a brief little bit about your background, because you've got a really great background. You didn't grow up in healthcare, but you grew up on health care.

SPEAKER_03 1:03

Exactly. Well, so I'm a surgeon by, I like to say by birth. My dad was a great surgeon and an inventor, actually. And my brother was is a surgeon. I'm married to a surgeon. I have two uncles who are surgeons all in Massachusetts for a collective centuries. So you kind of get it. Healthcare is kind of our the family business, or I should say, medicine is the family business. I've been a private practice surgeon outside of Boston for over 20 years. And I kind of was running my practice in the front lines in an inner city next to an affluent community, 15 minutes from academic centers. It's kind of very common scenario. And I realized that the healthcare system kind of didn't work, and I thought, maybe we can change it. So I sort of woke up one morning and got the bug to decide to fix it and change it. And then, as most entrepreneurs will tell you, you can't rest until you fix it. And I just kind of came up with a really simple solution to make better connections between physicians and patients. So, you know, in my 50s, I suddenly, my kids off to college, I I had a third child, and that's Uber Doc.

David 2:05

And everybody who's an entrepreneur, which is most of the folks who are listening, completely and totally understand that. So when you say that buying health care or health insurance is like renting an apartment, what do you mean?

SPEAKER_03 2:17

So if you think about it, you know, and again, this came from frustrating and writing lots of angry letters to the newspapers all the time. You see from the front lines how things kind of don't work. It's about money, it's about cost. But over the years, as a practicing surgeon, I've noticed that technology hasn't really made things more complicated. Technology made it easier for us, made it easier for us to do better things for our patients in more convenient places. We don't admit our patients to hospitals anymore for long hospital stays. We don't operate on the same things we used to operate on. I mean, what I used to do in the operating room for two hours, I do it in eight minutes in my office. Better, faster, cheaper, and my patients are much happier. I don't even operate on some things anymore, like carotid disease. You know, I just saw a patient, you treat it with a statin, you treat it with medical management. So it's always confusing to me how so much of health care has gotten more expensive when so much of medical care has gotten more efficient and accessible. So when you think about renting a house versus buying, you know, if you think about health insurance, it's a lot like renting an apartment. And now your landlord is making you pay for utilities, making you pay for snow removal, making you pay for the empty apartment across the corridor, and maybe even making you pay for their mansion down the street. But when you buy a house, you still pay money into something, but then at the end of it, you have equity. And I like to think of people building their individual health equity. You know, when you know that you have family history that might require sort of intervention later on in your life, isn't it good when you're healthy to put that money away that you could use in the future? And right now our healthcare system is like that rental. You just kind of put money in that doesn't come back to you, and you invest that money over time since probably the age of 15 when you have your first paycheck. And it's not just what you put into Medicare, it's what you put into your employer-based health plans. And I just feel like a lot of that money never comes back to the people who need to spend it. And because our healthcare system has diversified, has decentralized, has become more accessible with technology, I feel it's very strongly that patients should be able to have better options and buy, invest in their own personal health future. And I use, again, rental versus mortgage as an example.

David 4:44

So it should be more like buying a home where you have equity and you build value over time and you get to customize it to your needs and what you want, et cetera. So that's great, I guess, on the face of it, if you're an individual patient and you've got an episode of care. How do you do that for folks who are at the other end of that care continuum and have multiple chronic conditions?

SPEAKER_03 5:05

Well, some people might be in a high rent district where it's really expensive to buy. And they need it's better economically for them to rent permanently, right? I mean, that's exactly the analogy. And I think that that's those patients are easy to identify. Because in our system now, if you have a chronic disease, for example, renal failure, and you require dialysis, you know, your health care expenses are picked up by the Medicare. So there's already safeguards built into the system to allow you to get sort of like that permanent rental. But I think for everyone else, for the vast majority of patients, it's hard to pay a premium every month to have a job where you were even to take a job you're not really that fond of, but because of the benefits. And then you pay a premium every month. And for families, it can be 12 to 1,500, and that's not even counting what the employer's kicking in. And then you go see me, and then they say, okay, Dr. Muno, this is great, insurance covered this, but now you're paying me the whole amount. And they're like, I don't understand. I've paid my premium. I've been a good dubie. I've paid my premium and I paid my rent, and now you're making me pay you too. It doesn't make any sense to patients. And for as far as the the doctor's concerned, we it doesn't make any sense to us either. Because we don't want to treat a patient unfairly because they have insurance. They have to pay us more out of their pocket if they than they if they didn't. Doesn't make any sense. So I think we've kind of moved into that illogic world where patients are very unsatisfied with the economic equation when it comes to health care.

David 6:36

One of the things that you told me in our pre-interview that really floored me, didn't surprise me, but it floored me that the number was as high, is that two-thirds of healthcare spend is collecting data and managing care. Can you tell us a little bit about that?

SPEAKER_03 6:48

So this statistic has been rolling around quite a bit and it's been validated a number of times. If you look at the healthcare dollar as a dollar, 73% of it actually goes to management. Only 27% goes to health care. I look at that pie and I say, we're pretty good. We only need 27% of that pie. That 73%, however, is going into a lot of waste. I'm gonna just say it, waste. You know, why do you need to manage something? You know, in the days of AI, algorithms, computerized efficiency, do we really need all of these layers and layers of complexity anymore? And in an age of transparency as well, I mean, transparency is a federal law and think people are moving toward it. Do we need all this? And shouldn't some of that 73% be redirected? I say back to the patient to help manage the social determinants of health. You know, when I operate on you, you live perhaps, you know, in a family with a one-floor house with your spouse at home with you to take care of you. I operate on someone else, they might live in a six-floor walk-up. Their healthcare management is going to be difficult, and no one pays for that. It's not like you're in a hospital recovering, you're at home. So those social determinants of health really impact outcomes. And we don't fund those, we don't talk about those. But I like to think that 73%, which is management, middlemen, we know how ugly the system is with the middlemen and the GPOs and the PBMs and you know the kickbacks here or there. And the federal government tries to come in and say, you know, like with the CCA law, you gotta at least make it transparent. You don't have to take it away, but you have to at least tell people where your money's going. But if you look at the bigger picture of healthcare dollar in the United States, they say it's 30, 40% of the federal budget. It isn't, it's like 48%. Because when you take look at all the federal employees who have to have their health expenses, you add that in, healthcare makes about 48% of the pie. When you do the math on that, 48% is almost half our tax dollar. And then a third of that all goes to medical care, two-thirds of it goes to management. So if you do the math, it's about 30% of our tax dollar is going to middlemen. And I think that's probably something the American public wouldn't want.

David 8:56

CCA is great, but it seems to me that unless we take some other actions, all CCA has done, at least on the face of it and early on, is that you're still being robbed. The robber's just taken off his mask. So how do we go about flipping that ratio, that two-thirds ratio, so that we get three-quarters of our care or two-thirds of our care dollars into care and the rest of it into admin?

SPEAKER_03 9:19

I think it's like everything else, it's going to be driven by the consumer. Everyone talks about healthcare consumerism. And at first it's sort of like, oh, you know, I'm going to go online and learn about, you know, my disease or last Dr. Google. Then I'm going to go online and maybe I'm going to get a prescription. And we know that's fraught with all sorts of issues. And maybe I'm going to go online and do something else. It's not about going online and just interacting necessarily. I mean, yes, virtual health is out there and so forth. What I mean by healthcare consumerism is that they're going online and finding me, a surgeon who's nearby and available, and coming to seek care. Why? Because they can't get into their primary. Why? Because they look down in their leg and they see something and they do some research and they say, I'm going to take initiative and find the doctor that can solve my problem. And what soon as the only thing that prevents anything in that equation from occurring is the price. Right? People have been convinced that you need your insurance card to gain access. That's your ticket. You need that ticket. And sometimes that insurance card limits where you can go. And you can't go to that doctor nearby and available. You have to go to another state. You know, because that's the plan your employer assigned you up for. That's silly. And it's not working and it's not good. So patients don't change their behavior. When you have a problem, you want it solved. That's why over 75 years of trying to limit ER visits, it's never happened. The only thing that limited ER visit is when you thought you'd get COVID if you went to the ER, but ER, walk-ins, urgent cares, no matter what you do, no matter how many telehealth solutions you have, the patients still, it's still that number has never changed because that's human nature. Because medicine is a context or so. I think the consumer will end up driving this because they will see value where there is value. When a problem gets solved because you get into that orthopedic who's like three miles from you, and they're like, oh my gosh, I hurt my shoulder, my shoulder doesn't hurt anymore. It's just that simple. Versus, I hurt my shoulder. Now I have to go here. Now I have to do this visit. Now I have to do three rounds of physical therapy before I can get an MRI. I mean, those are all basic point solutions that were sold to employer plans. Those aren't based in any kind of like medical medicine. So I think that the consumer will drive this. The consumer, you give them the dollar to spend, they will spend it. And luckily, because the costs are so extreme, there has to be an alternative. And this is why we're seeing the rise of so much direct-to-consumer health care.

David 11:56

And that's a great transition. Let's we mentioned this in the open that you are a proponent of the direct pay model. Explain to the audience who may not be familiar with it what is the direct pay model, and then we can talk about what impacts you expect that it will have.

SPEAKER_03 12:08

So I like to coin the term DPO. People have HMOs, PPOs, DPO. What's a DPO? A direct pay option. What does that mean? It means that there's a supermarket aisle for cash that you can use your insurance card, or perhaps you can go direct. And when you go direct, it just means that I'm going to potentially buy my medication from like, you know, Mark Cuban's Cost Plus, or maybe I'm going to get an image from like Green Imaging, or maybe I'm going to make an appointment with UberDoc. Or, you know, in other words, I can use my health savings account, my FSA, or even my credit card, again, my own health equity, to purchase medical services. Again, we're a service industry. Now you can also use it to purchase products, you know, like the medications and so forth. So that's the direct pay model. And so sometimes it's worth using your insurance because you know that the cost of that care is complex. It's going to require multiple levels. If you're going to, if I'm going to operate on you, David, I'm, you know, it needs anesthesia, it needs pathology, maybe a hospital state recovery room, you know, those are all costs that are probably too much to pay out of pocket or negotiate. But again, 90% of care is occurring in outpatient settings, in offices with experts that can handle your issue, your problem and solve your problem. So again, the direct pay option is a very logical and practical solution. And it doesn't remove insurance. It just gives patients that, you know, again, that little health equity piece, the part that they can control. And I do believe it'll lower the cost overall because I always say, like, why do you use your car insurance for every oil chain? It shouldn't you just pay out of pocket for that? But to pay out of pocket means there has to be something the patient gets back, which means that their either their premium has to be reduced or part of that premium has to go to a savings account so that that can go and build their health equity.

David 13:57

So it's almost like what they're talking about with schools now, which is where the money follows the student. This would be the money follows the patient rather than the other way around. Tell us what role UberDocs is playing in that. What does UberDocs do and how does it help work towards that goal?

SPEAKER_03 14:12

So we're a really simple platform. We just thought, wouldn't it be nice if you could just make an appointment with the doctor and not make a phone call and pay a transparent price and make that price lower than insurance but above Medicare to be legal? So basically that's all we are. We're an appointment maker and a payment processor. But what we've done is we've done the negotiation for you. We have a price, and the doctors can set their price, and they can't set it too high, they can't set it too low. It's that's the price. And it's transparent, and that's it. You find you have a problem, you have a rash, you need a dermatologist, you find one nearby and available, and that's it. And the word nearby also means that doctors within state lines who have virtual appointments can also be accessed. So we are both an in-person and a telemedicine platform. But telemedicine is just the location that you're meeting the specialist. I like to say all of our physicians on the platform are specialists because all physicians are in fact specialists. That means we do have specialists in primary care, internal medicine, family practice, as well as neurosurgery, pediatrics. We have every specialty covered. What makes us a little different is we're no, there aren't any mid-levels on our platform. We, you know, many times people say, I went to go see my doctor, and you know, you're seeing that, you know, the nurse practitioner in the office or you know, someone else. These are physicians that are experienced and more importantly, trained, licensed and trained. We underestimate the importance of training. Training is incredibly important. I can't practice pediatrics. I have to go back and retrain. You know, I can't decide I'm gonna be an ENT surgeon, I'm a vascular surgeon. I have to go back and do retraining. And it's something that people underestimate in terms of the prescribing capability versus the treatment capability of any one of these, you know, people. So our platform is very simple. So we are giving patients the opportunity to spend their health care dollar, initiate their care journey. It may require insurance at the end, you know. In other words, you could veer off and say, well, now you need an MRI, David, you know, and you may not want to pay for that out of pocket. Maybe your insurance will cover that. The nice thing is our app has an insurance reimbursement tool as well, so that patients can start their journey cash, and then if they want to anywhere in that journey, submit to insurance later for reimbursement, that opportunity will be there, which kind of makes it really full circle. So again, we feel like we're an agnostic model. We are an add-on, we're an appointment maker. Every doctor can have an Uber Doc seat in their waiting room. And I ask every doctor listening to please give me a seat in your waiting room next to your Medicare patient, your Medicaid patient, your Uber Doc patient. Just leave that seat open.

David 16:52

I've been at this just long enough to remember when you went and got medical care and you had insurance, you would pay and then you'd file. So that option is available. You don't have to wait to be further along in the care continuum if you make an appointment and you see a doctor, and it's something that would have been covered under your insurance, and you pay that doctor and you're a model, you can always submit the claim.

SPEAKER_03 17:11

Right. Well, we've kind of come full circle in the fact that patients kind of get that doctor visit. Well, they don't get it for free. It's $50, $75 copay. If you're out of network, it's more and all this. But then when you have your surgery, which is the it the reason you have your insurance card, or you have a chronic disease, or you have to buy that medication, you're still paying a lot. It's like so the insurance, you bought your insurance for collision, but now you realize it doesn't cover collision. You know, it covers your oil change a little bit. You know, it's like I don't want that. I don't need insurance for that. I need insurance for the big stuff.

David 17:43

Right. I can change the oil, I can cover the windshield wipers.

SPEAKER_03 17:46

And I think that that's where health care and medicine are separated. So the practice of medicine is a service industry that can be handled very nicely, and it is a hundred percent transactional. There's no this concept of no fee for service, well, all medical care is in fact a transaction. Every dot time I talk to you in my office, it is a transaction between me and you, right? You're coming to me and sharing a private issue about your health, and I am giving my expert opinion. That's transactional. You can't erase that, no matter how hard you try. But healthcare is this whole other issue. What's healthcare? Healthcare is a product, right? You're buying insurance, you're buying access, and you have to buy insurance to perhaps afford your medication. You have to buy insurance. It's almost like you're paying a toll. So I like to separate medicine from healthcare. And Uber Docs sits in the medical side. We are selling medical services, access to medical services. We are not selling health care. Does that make sense?

David 18:43

It does. And that's a great place to end our conversation for today. But we do hope you'll come back because I think this is something that's going to start gaining more and more traction because there's no more places left to go. There's no more there there, as somebody once said. So Paula Muto is also a practicing physician, but she is most importantly today founder of Uber Docs. Paula, thanks for sharing your expertise with the audience.

Announcer 19:05

Thank you for having me, David. The Shift Shapers Podcast is a production of Shift Shaper Strategies and may not be reproduced or quoted in whole or in part without our express written permission. Copyright 2020, all rights reserved.