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How to Save the Most Lives · What's Your Problem?

0:15
Speaker 1: Pushkin. Think of everything everybody in the United States buys
0:24
Speaker 1: in a year, all the food, all the clothes, insurance, education, housing, travel, iPhones,
0:31
Speaker 1: everything of all the stuff we buy. Out of all
0:36
Speaker 1: the money we spend, around twenty percent, around one in
0:41
Speaker 1: five dollars, is spent on healthcare. This is extraordinary. It
0:46
Speaker 1: is completely out of line with what other people in
0:49
Speaker 1: other countries spend. It's about twice as much as what
0:52
Speaker 1: other rich countries spend relative to their GDPs on healthcare.
0:56
Speaker 1: And crucially, we in the US do not get better
1:00
Speaker 1: health outcomes, So we're spending lots of money without much
1:04
Speaker 1: to show for it. For a long time, people have
1:08
Speaker 1: looked at this problem and thought, what if instead of
1:10
Speaker 1: paying doctors and hospitals to treat us when we get sick,
1:14
Speaker 1: we could pay them to keep us healthy. Is there
1:17
Speaker 1: some way we could spend less on healthcare and get
1:21
Speaker 1: better results. I'm Jacob Goldstein, and this is what's your problem.
1:29
Speaker 1: My guest today is Farzad Mosta Shari. He's the co
1:32
Speaker 1: founder and CEO of a healthcare company called Alde. Farzod's
1:36
Speaker 1: problem is this, how can you pay doctors to keep
1:40
Speaker 1: us healthy rather than treating us after we get sick.
1:44
Speaker 1: People have been struggling to solve this problem for decades,
1:47
Speaker 1: but for a bunch of reasons you'll hear about on
1:49
Speaker 1: the show, Farzad and his fellow travelers may be the
1:52
Speaker 1: ones to finally solve them. Before he became an entrepreneur,
1:58
Speaker 1: Farzad went to medical school, but he told me that
2:01
Speaker 1: back in the mid nineties, when he was doing his
2:04
Speaker 1: clinical training, his residency and internal medicine, he started to
2:08
Speaker 1: question what he was and what he was not learning.
2:11
Speaker 1: I kept looking at stuff that was happening and being like,
2:15
Speaker 1: this doesn't make sense to me, Like why, like you're
2:19
Speaker 1: telling you're teaching me how to you know, treat someone
2:22
Speaker 1: who's coming in here with difficulty breeding in the emergency room.
2:24
Speaker 1: I get that, Like it's really important that that person
2:27
Speaker 1: get their treatment, their nebulizer so they can breathe again,
2:30
Speaker 1: that's really I get that. But why is this person
2:33
Speaker 1: coming in today? Why is it all of a sudden
2:38
Speaker 1: we're seeing people coming in with breeding problems. Why why
2:42
Speaker 1: is it that the people who tend to come in
2:44
Speaker 1: with breeding problems tend to be from these neighborhoods, not
2:46
Speaker 1: other neighborhoods. And it was those questions that were between
2:52
Speaker 1: medicine and public health and ibidemology that really grabbed me
2:56
Speaker 1: so far as Odd finished his residency and went into
2:59
Speaker 1: public health, and he had this this trait that at
3:02
Speaker 1: the time was kind of a superpower. He was really
3:05
Speaker 1: into computers. So I came of age at a time
3:09
Speaker 1: when in a way, you know, asking the question can
3:14
Speaker 1: you use a computer for that was was like, uh,
3:20
Speaker 1: you know, unlocked a lot of a lot of value.
3:23
Speaker 1: And so I joined the New York City Health Department
3:25
Speaker 1: and I said, oh, public health surveillance, can we use
3:28
Speaker 1: a computer for that? Right? So one of my first startup, Jacob,
3:33
Speaker 1: was a within the New York City Department of Health
3:36
Speaker 1: where I started. Was one of the group of people
3:38
Speaker 1: who started this national idea of why don't we why
3:43
Speaker 1: don't we track when when someone gets logged into the
3:46
Speaker 1: emergency room for just for their registering the patient in
3:50
Speaker 1: the emergency room, or when an ambulance gets dispatched, or
3:53
Speaker 1: when when when some item in the pharmacy goes beep
3:56
Speaker 1: across the scanner. Like before all those things were on paper.
4:00
Speaker 1: Now they're all electronic, which means I can get a
4:03
Speaker 1: copy and if I can get a copy, then I
4:06
Speaker 1: can tell you in real time that something's happening to
4:10
Speaker 1: the health of the city. Right that was That was
4:14
Speaker 1: like consumed me for five to ten years, and it
4:17
Speaker 1: was really really cool. It was really really fun, and
4:19
Speaker 1: that system TILT today is the system that we use,
4:23
Speaker 1: for example, during COVID to see that what was happening
4:27
Speaker 1: in the city. But then something fundamentally shifted in my life,
4:31
Speaker 1: which was Mike Bloomberg asked the Commissioner of Health at
4:35
Speaker 1: the time, who turned to me. I was like the
4:39
Speaker 1: data guy, and the question he asked was, don't worry
4:44
Speaker 1: about the politics, don't worry about the budget, don't worry
4:46
Speaker 1: about any of that. Your job is to answer the question.
4:49
Speaker 1: What's the question? And the question was what's the problem?
4:52
Speaker 1: What's your problem? As you might say, the question was, hey,
4:57
Speaker 1: how do we save the most lives? And I was
5:01
Speaker 1: like can I swear? Oh yeah? Fuck? That was like
5:09
Speaker 1: what am I doing? Like? What am I doing? Why
5:13
Speaker 1: am I not starting with that question? That is such
5:17
Speaker 1: the right question, how do we save the most lives?
5:20
Speaker 1: And it turned out that no one in like, we're
5:24
Speaker 1: spending three four trillion dollars, We're doing all this activity right,
5:28
Speaker 1: and no one was starting from that viewpoint. There were
5:31
Speaker 1: hundreds of thousands of research articles written about various things
5:35
Speaker 1: that we're doing, and no one was saying, what is
5:39
Speaker 1: this the scientific, evidence based answer to the question how
5:43
Speaker 1: do we save the most lives? And it turned out,
5:45
Speaker 1: in New York City in the year of Our Lord
5:47
Speaker 1: two thousand and two, the answer to that was smoking.
5:50
Speaker 1: The answer to that was we're going to attack smoking.
5:53
Speaker 1: So that meant that we were going to dedicate more
5:57
Speaker 1: of our living waking hours to how do we reduce
6:01
Speaker 1: smoking in New York City than we do to anything else.
6:04
Speaker 1: And within the time span of four years, we drove
6:09
Speaker 1: I was a small part of a big effort to
6:11
Speaker 1: drive teen smoking from fourteen to seven percent in New
6:14
Speaker 1: York City, to drive adult smoking from twenty two point
6:17
Speaker 1: eight percent to sixteen point eight percent. That saved more
6:21
Speaker 1: lives than anything else we could have possibly done. And
6:24
Speaker 1: then the next question was, Okay, that's public health. That's great,
6:29
Speaker 1: that's changing the environment within which people make decisions. But
6:32
Speaker 1: we know what we're spending all this money on healthcare?
6:35
Speaker 1: What can healthcare do to save the most lives? Just
6:38
Speaker 1: stay with that question. That's such a clarifying question that is,
6:41
Speaker 1: so that is my flaming sword, right, It's like, how
6:47
Speaker 1: can we save how can medicine? How can healthcare save
6:50
Speaker 1: the most lives? And again no one had the answer.
6:54
Speaker 1: So we published this paper, Randy analysis. Do you want
6:58
Speaker 1: to take a guess, Jacob, as to what thing in healthcare?
7:02
Speaker 1: If we you know, we have thousands of evidence based
7:06
Speaker 1: guidelines and protocols and quality measures, and like, what is
7:10
Speaker 1: the one thing? And then phrase the question, well that
7:13
Speaker 1: if you took the performance of the American healthcare system
7:15
Speaker 1: from where it is today to where the best American
7:18
Speaker 1: healthcare institutions can perform, would reduce the number of premature
7:22
Speaker 1: deaths by the greatest amount. Do not have any idea
7:25
Speaker 1: what that would be? Based on my preparation for this interview,
7:30
Speaker 1: I'm gonna guess lowering people's blood pressure. Yeah all right,
7:35
Speaker 1: see that's not fair because you've been listening. I did
7:39
Speaker 1: my homework. Homework, you did your homework. But the funny
7:44
Speaker 1: thing is that if you ask that question of you know,
7:47
Speaker 1: hospital CEOs, they'll say, like getting stroke patients to the
7:51
Speaker 1: hospital ten minutes faster something. Yeah. Yeah, they'll say, like,
7:55
Speaker 1: let's not kill people in the hospital through infections, they'll say, right, well,
7:59
Speaker 1: because it's not really traditionally a hospital CEO's job to
8:03
Speaker 1: keep people out of the hospital, which is what you
8:05
Speaker 1: want to do if you want people not to die,
8:07
Speaker 1: right exactly. But even if you if you talk to
8:09
Speaker 1: health planned people that they don't know right there, if
8:12
Speaker 1: you if you look at the number of quality measures
8:15
Speaker 1: that doctors are incentivized and measured against, right, like, there's
8:20
Speaker 1: not a there's not a ten x difference between the
8:23
Speaker 1: amount of importance placed on blood pressure control. Then there
8:25
Speaker 1: is the amount of importance placed on mamograms and colonoscopies
8:29
Speaker 1: and flu vaccines and all that other stuff. Right, it's
8:31
Speaker 1: all good stuff. And you're saying the evidence as the
8:33
Speaker 1: efficacy of lowering blood pressure means there should be a
8:36
Speaker 1: ten x difference between blood pressure and right, it's just
8:39
Speaker 1: gigantic and it's sable, right like, And it's just science
8:43
Speaker 1: of blow Like we know there's cheap, cheap, safe drugs,
8:46
Speaker 1: there's life like, we know how to lower people's blood pressure.
8:50
Speaker 1: And and then that was the that became my problem. Right,
8:53
Speaker 1: It's like, well, why aren't we why aren't we why
8:56
Speaker 1: aren't we controlling blood pressure, and I came to the
9:00
Speaker 1: wrong answer. And the reason I came to the wrong
9:04
Speaker 1: answer was because I tended to be the kind of
9:07
Speaker 1: person who said, can use a computer for that. You
9:11
Speaker 1: saw the computer as it was, It was your hammer.
9:15
Speaker 1: So every problem looked like a nail that could be
9:18
Speaker 1: hit with the computer. And look, there was some truth
9:21
Speaker 1: to it, right, Like the truth to it was, you
9:24
Speaker 1: can't improve blood pressure control if you can't even know
9:30
Speaker 1: what blood pressure control rates are, right, Because you actually
9:34
Speaker 1: couldn't tell what blood pressure control rates were in any
9:37
Speaker 1: given practice, any given population, because the data was trapped
9:42
Speaker 1: in deadwood that there were you would write it down,
9:45
Speaker 1: You would write down the person's bloodressure control. How would
9:47
Speaker 1: I even know, if I'm a doctor what percent of
9:50
Speaker 1: my patients had their blood pressure control? I literally couldn't,
9:53
Speaker 1: with a room full of paper charts, answer that question.
9:56
Speaker 1: I couldn't have quality improvement. I couldn't have decisions support
9:59
Speaker 1: that would prompt me when I'm seeing a patient. I
10:02
Speaker 1: couldn't have a registry that made a list of the
10:04
Speaker 1: patients to say, can you use a computer for that? Right?
10:08
Speaker 1: As your friend that problem with the computer, yeah, so
10:13
Speaker 1: then so then we and we had a big concern
10:16
Speaker 1: around around what was now called health equity. So we
10:19
Speaker 1: went around to the doctors in New York City's poorest neighborhoods,
10:24
Speaker 1: in Harlem, in the South Bronx, in Central Brooklyn, bed Stye,
10:30
Speaker 1: and we said, hey, guess what you've been Medicine has
10:32
Speaker 1: been using paper and pen for thousands of years. We're
10:35
Speaker 1: going to give you a free electronic health record with
10:38
Speaker 1: all of these functionalities built into it. And we spent
10:40
Speaker 1: the next year and a half building into the h
10:43
Speaker 1: ARE the functionality electronic health record, the functionality that we
10:46
Speaker 1: thought should exist in those electronic health records, and then
10:51
Speaker 1: we did that. We rolled it out to half of
10:53
Speaker 1: all those primary care docs in New York cities poorest neighborhoods.
10:57
Speaker 1: So mission accomplished. But you know, you want to guess
11:01
Speaker 1: what happened to blood pressure control rates? They did not improve.
11:06
Speaker 1: They did not improve, And the number of strokes and
11:09
Speaker 1: the number of heart attacks and the number of kidney
11:12
Speaker 1: failures from that continued just as much. And so that
11:16
Speaker 1: was my continued frustrating He said, what was your frustration.
11:20
Speaker 1: That's my frustration is, um, I didn't feel like I
11:26
Speaker 1: felt like we'd done all this work, and at the
11:29
Speaker 1: end of the day, the reason we'd done all that
11:31
Speaker 1: work hadn't hadn't been accomplished. And I reluctantly, you know,
11:36
Speaker 1: for twenty years, Jacob, I had like I was a
11:39
Speaker 1: public health guy, I was a government person, like like
11:43
Speaker 1: I was not a private sector person. And in fact,
11:46
Speaker 1: I kind of thought that the profit motive was the
11:50
Speaker 1: problem in many cases. And that's right, and it's wrong.
11:56
Speaker 1: And what I reluctantly came to see is that the
12:02
Speaker 1: financial incentives are the water we swimming and and and
12:08
Speaker 1: that sometimes we and even see it likes it shapes
12:12
Speaker 1: the force of everything around us, the gravity that pulls
12:16
Speaker 1: on us or not right, like everything around us is
12:20
Speaker 1: there's this invisible thing which is the financial incentives of
12:23
Speaker 1: the system. And I was trying to ignore them. I
12:27
Speaker 1: was trying to pretend like they didn't exist. And in fact,
12:31
Speaker 1: the financial incentives of the healthcare system are to treat strokes.
12:37
Speaker 1: They are not to No one makes billions of dollars
12:40
Speaker 1: preventing strokes. No one makes you make money waiting until
12:45
Speaker 1: literally waiting until someone's kidney fails, and then there's billions
12:51
Speaker 1: of dollars available to you. For treatment of like taking
12:56
Speaker 1: someone's blood out of their body, running it through a
12:58
Speaker 1: machine and returning it to them. There's a lot of
13:00
Speaker 1: money in that, not needing that. There's not a lot
13:04
Speaker 1: of money doing that. You're talking about strokes and kidney
13:08
Speaker 1: fail because we know that lowering blood pressure, which is
13:14
Speaker 1: relatively cheap to do, lowers the risk of strokes and
13:18
Speaker 1: kidney failure. But you're saying we don't lower blood pressure,
13:21
Speaker 1: and that happens because that's literally the money in healthcare flows,
13:27
Speaker 1: because doctors and hospitals get money for treating strokes and
13:32
Speaker 1: kidney failure and not for lowering blood pressure. Yeah. I
13:35
Speaker 1: mean there's one the one part of the healthcare system
13:39
Speaker 1: that is supposed to be in charge of the controlling
13:42
Speaker 1: the blood pressure, which is primary care. Right, it's the
13:44
Speaker 1: primary care part. And guess what part of our healthcare
13:48
Speaker 1: system makes the least money, makes the you know, has
13:52
Speaker 1: the least prestige in in where I trained, right, it's
13:56
Speaker 1: it's Oh, those those people who you know they talk
13:59
Speaker 1: to patients, they don't they don't you know, they don't
14:01
Speaker 1: cut the patients, they don't do procedures on them, they
14:04
Speaker 1: don't do expensive scans on them, right, They sit in
14:08
Speaker 1: a little room and they talk to the patient about
14:10
Speaker 1: why they should take their medicine. Right. Oh, those those
14:13
Speaker 1: those poor, those poor little primary care doctors. We spend
14:17
Speaker 1: five percent of healthcare costs on primary care, five percent.
14:21
Speaker 1: We spend as much on ICUs as we do on
14:23
Speaker 1: primary and even primary care doctors traditionally do not get
14:28
Speaker 1: more money when their patients stay healthy. Right. And I
14:31
Speaker 1: know primary care doctors are not motivated by money explicitly,
14:36
Speaker 1: but but still the incentives don't push primary care doctors
14:40
Speaker 1: to reduce their patient's blood pressure though they I'm sure
14:44
Speaker 1: they want to, they don't get paid more if they do. Traditionally,
14:49
Speaker 1: until twenty twelve, big moment, big narrative moment happening, big moment,
14:59
Speaker 1: say healthcare economics, Cliffhanger. We'll get to that big moment
15:04
Speaker 1: and to how it led Farza to start his company
15:07
Speaker 1: in just a minute. Okay, now back to the show
15:15
Speaker 1: to find out what exactly happened in twenty twelve. In
15:19
Speaker 1: twenty twelves, the rules for accountable care are published by
15:26
Speaker 1: the Center for Medicare and Medicaid Services. That basically says,
15:29
Speaker 1: if you get a group of primary care dots together,
15:32
Speaker 1: and you gain accountability for the total cost of care
15:37
Speaker 1: for the patients they care for. If those costs come down,
15:41
Speaker 1: we will give you half of that those savings. And
15:45
Speaker 1: it was like it was like the heavens had opened up, right,
15:49
Speaker 1: And I was like, oh my god. And I was like,
15:51
Speaker 1: primary care docs don't realize the power they have in
15:55
Speaker 1: this new world. And the only problem, right was that
16:00
Speaker 1: if you're if you're an independent, small primary care practice,
16:06
Speaker 1: you don't really have the scale to to band together
16:10
Speaker 1: with one hundred other groups to pool your patients, to
16:13
Speaker 1: take that actuarial risk, to understand the regulations, to have
16:16
Speaker 1: the data systems to know what the playbook is to
16:19
Speaker 1: actually reduce costs, right. And I was like, yeah, but
16:23
Speaker 1: that's easy. That's the easy stop you for that. You
16:28
Speaker 1: can use the computer for that. Someone's good. I was like,
16:32
Speaker 1: someone's gonna build a business doing this. So I just
16:37
Speaker 1: want to I just want to make sure that we're
16:40
Speaker 1: really clear about what rules are actually changing here, right Yeah,
16:45
Speaker 1: So okay, so um so the traditional way that almost everybody,
16:52
Speaker 1: including medicare, the federal program that pays for old people's healthcare.
16:57
Speaker 1: It's but probably the most important sort of payer and
17:00
Speaker 1: healthcare in this country. Right, they pay doctors fee for service.
17:04
Speaker 1: You do your doctor, you do something for a patient,
17:06
Speaker 1: you get money. And so what's happening in two thousand
17:09
Speaker 1: twelve is the government is saying Medicare is offering doctors,
17:15
Speaker 1: primary care doctors in particular, a different way to get paid, right,
17:19
Speaker 1: and they call it accountable care, Like, what exactly does
17:22
Speaker 1: that mean? So that means that if you submit an
17:27
Speaker 1: application to the government, your primary care doctor, you and
17:30
Speaker 1: your friends submit an application to the government, and the
17:34
Speaker 1: government says, oh, you care for these named human beings, right,
17:39
Speaker 1: you're the primary care doctor for these Medicare beneficiaries. So
17:43
Speaker 1: if you have ten thousand Medicare beneficiaries who are getting
17:48
Speaker 1: primary care from you, the Medicare actuaries, that's their job.
17:53
Speaker 1: They look to see who are those people, what have
17:56
Speaker 1: their costs been in the past, how sick are they?
17:58
Speaker 1: And they're going to say, ah, next year, we think
18:01
Speaker 1: those ten thousand lives are going to cost us a
18:06
Speaker 1: hundred million dollars. Now, if the actual costs, once all
18:11
Speaker 1: the claims are submitted and all the costs are counted up,
18:14
Speaker 1: all of the hospitalizations, all the specialist visits, all the
18:17
Speaker 1: medications and scans and everything else that gets done to
18:20
Speaker 1: the patient. If that actual cost comes in not at
18:23
Speaker 1: one hundred million, which was our budget, but at ninety million,
18:26
Speaker 1: there's ten million dollars of savings, and we will share
18:30
Speaker 1: those savings with these docs. We will give say half
18:34
Speaker 1: of those savings to the docks. So of that ten
18:37
Speaker 1: million dollars of savings, the government gets to keep five
18:40
Speaker 1: million they spent less, and the docks get five million.
18:45
Speaker 1: And you have to prove that you actually improved quality
18:49
Speaker 1: while you reduced cost of care. It's a fundamental rewriting
18:53
Speaker 1: of the incentive structure of American healthcare. So you see
18:57
Speaker 1: this new thing in the world, and what do you think.
19:02
Speaker 1: I think, Who's someone's going to build this business that
19:06
Speaker 1: does this? And I went to the Brookings Institute where
19:08
Speaker 1: they had done a lot of the foundational work on
19:10
Speaker 1: this idea, and I created a learning network to teach
19:13
Speaker 1: other people how to do it, and we published a
19:15
Speaker 1: tool kit, and we had a learning collaborative. And I
19:18
Speaker 1: kept waiting for nine months. I kept waiting for I
19:21
Speaker 1: was like literally every morning I'd wake up and I'd
19:24
Speaker 1: be like, Who's Who's starting a company to do this.
19:27
Speaker 1: Where where is that come? It's such an obvious idea,
19:30
Speaker 1: I thought to myself, it is like and the obvious
19:33
Speaker 1: thing for me was, well, I ain't going to be
19:35
Speaker 1: the hospitals, right, the most powerful people in healthcare today
19:41
Speaker 1: are hospitals and health systems under one incentive structure. But
19:46
Speaker 1: getting those people, the incumbents, the ones who are powerful
19:50
Speaker 1: in the current system, the goliaths, getting them to change
19:54
Speaker 1: their economic model, well, that's never going to happen. Whereas
19:57
Speaker 1: you go to a you know, we got a group
19:59
Speaker 1: of primary care dogs, You're like, hey, you got nothing
20:01
Speaker 1: to lose but your chains. Yeah, they already don't like
20:05
Speaker 1: the system. Right with primary care dots. If you're starting
20:07
Speaker 1: with people who are disgruntled as a as a general rule,
20:12
Speaker 1: are appropriately pissed off of the current system, doesn't help
20:14
Speaker 1: them take the care of their patients that they believe
20:16
Speaker 1: their patients should be getting. So okay, every day you're
20:20
Speaker 1: looking for somebody to start this obvious company doesn't happen.
20:24
Speaker 1: And so I went for a walk with the VC
20:30
Speaker 1: and that metaphor or literal did you actually go literal
20:35
Speaker 1: without Yes? Yes I did, Yes I did. They got
20:40
Speaker 1: it right, away, and they were, you know, they saw
20:43
Speaker 1: the long term opportunity for combining information and incentives in
20:49
Speaker 1: a new way and creating a new business model, and
20:51
Speaker 1: so they like, literally we had one one pitch meeting
20:55
Speaker 1: after that, and they they they gave us the money
20:59
Speaker 1: to start the company. To to my co founder and
21:01
Speaker 1: I to Guvees who had never started business before. Were
21:06
Speaker 1: there moments as your getting the company going, as it's growing,
21:11
Speaker 1: when there were things that were harder than you expected,
21:15
Speaker 1: things that didn't work that you thought would work. I mean,
21:17
Speaker 1: is this obvious idea to you? Yeah? Was it obvious
21:21
Speaker 1: to everybody else? Well, obviously not. And I think the
21:30
Speaker 1: biggest thing that didn't make sense to people was the
21:33
Speaker 1: going after these independent practices community docs as opposed to
21:40
Speaker 1: the big, gleaming health centers. But the thing that really
21:48
Speaker 1: shook us was we we went out and we signed
21:53
Speaker 1: up our first groups of doctors in four states, and
21:59
Speaker 1: it felt just charmed. Everything was magic, And we built
22:03
Speaker 1: our software system and we started analyzing the data and
22:06
Speaker 1: we started doing the stuff that we knew was the
22:09
Speaker 1: right things to do for patients, and wholly commole hospitalization
22:14
Speaker 1: rates came down measurably within that first year seven percent.
22:20
Speaker 1: It worked. It worked, and it was like and it
22:23
Speaker 1: was you know a lot of elbow grease and grit
22:24
Speaker 1: and whatever, but just just churning the focus of these
22:28
Speaker 1: primary care docs on reducing r visits, reducing hospitalizations was working.
22:35
Speaker 1: And I was like, oh my god, charmed life, right, Like,
22:38
Speaker 1: this thing is, this thing is gonna work, gonna totally
22:40
Speaker 1: take off. And then we got the results from our
22:44
Speaker 1: first year's performance, and sure enough, total hospitalizations went down
22:51
Speaker 1: by seven percent, the biggest source of suffering in American healthcare.
22:55
Speaker 1: Quality went up and costs did not come down. Huh
23:00
Speaker 1: So it didn't work. It seemed like it was working,
23:02
Speaker 1: but the core bottom line things, they didn't come down,
23:07
Speaker 1: and we only get paid. Like we had done all
23:09
Speaker 1: this work, burned all this cash, hired all these people,
23:13
Speaker 1: gotten all the hopes of these doctors up right, and
23:17
Speaker 1: and we and these investors and we told them, hey,
23:21
Speaker 1: it's working. We're gonna get paid. And you don't get
23:24
Speaker 1: paid for improving quality or reducing hospitalizations. You get paid
23:27
Speaker 1: if total cost of care comes down. And when we
23:30
Speaker 1: looked into it and we actually published a paper, you're like,
23:33
Speaker 1: this sucked. Let's tell the world, how much pain we're
23:36
Speaker 1: in and what happened? And so what we learned was
23:40
Speaker 1: that the hospitals, when faced with a decrease in utilization,
23:45
Speaker 1: changed their coding so they got paid more for admission.
23:50
Speaker 1: And to be clear, changing their coding means changing the
23:53
Speaker 1: way they bill, so they're billing so that they get more.
23:57
Speaker 1: There are fewer patients coming to the hospital, they're billing
23:59
Speaker 1: more for each patient. For each patient. Yeah, so okay,
24:04
Speaker 1: so so far you're not making any money, right because
24:06
Speaker 1: you make money by saving money. What do you how
24:09
Speaker 1: do you respond? Well, we had also in the in
24:13
Speaker 1: the intim we had, we had massively expanded, So not
24:18
Speaker 1: only were we waiting to see if we were going
24:20
Speaker 1: to get paid, but we went out there and on
24:22
Speaker 1: the success of the vision and the mission and the
24:25
Speaker 1: tools we built and the early results we got, we
24:28
Speaker 1: signed up a hundred practices in five new states and
24:33
Speaker 1: we had to make it work. So we went to
24:36
Speaker 1: five states and fortunately in that first year with this
24:40
Speaker 1: new batch, one out of five states the docs got paid.
24:44
Speaker 1: If the initial problem is that, as the doctors you're
24:48
Speaker 1: working with, our lowering admission rates to hospitals, hospitals are
24:52
Speaker 1: effectively charging more for each admission. How do you solve that?
24:56
Speaker 1: How do you how do you fix that? There's only
24:59
Speaker 1: a limit to how much you can play those games,
25:01
Speaker 1: how much the hospitals can play those games? Yeah? Yeah, yeah,
25:05
Speaker 1: so you so you just drive down admissions even more,
25:08
Speaker 1: even more. Yeah, And were you able to do that? Yeah? Yeah,
25:11
Speaker 1: So we're now down seventeen percent. Hospitalizations are down seventeen
25:18
Speaker 1: percent in for our patients compared to what they would
25:23
Speaker 1: be if they were just like everybody else in their communities.
25:27
Speaker 1: So that's gigantic. So you're saying, same kind of patients
25:30
Speaker 1: you match the you know, big batch of patients, thousands
25:33
Speaker 1: of patients, if they're working with the doctors you work with,
25:37
Speaker 1: they're seventeen percent less likely to be admitted to the hospital. Correct?
25:42
Speaker 1: Is that at all a function of selection bias? The
25:44
Speaker 1: fact that docs who sign up with you already have
25:47
Speaker 1: a lower admission rate among their patients because that's what
25:49
Speaker 1: they're into. I mean, that's such a big effect. It is,
25:53
Speaker 1: And this is compared to themselves, So it's it's it's
25:58
Speaker 1: comparing our practices compared to themselves before, compared to non
26:04
Speaker 1: practices compared to themselves before right. So it's the same docs,
26:08
Speaker 1: the same doctors, the patients get admitted to the hospital
26:11
Speaker 1: seventeen percent less often once they sign up with you. Then, yeah,
26:17
Speaker 1: how how do you do that? I mean, I understand
26:19
Speaker 1: that incentives are powerful. Is it just the money? No,
26:25
Speaker 1: can use a computer for that. Um, it's it's actually
26:30
Speaker 1: creating data to target the right people for the right interventions.
26:37
Speaker 1: It's doing the basics better. So the fundamental thing that
26:41
Speaker 1: we're doing is we're increasing more access to primary care.
26:44
Speaker 1: So we get thirty four percent more visits to primary
26:48
Speaker 1: care doctors for the patients in particular who need it
26:50
Speaker 1: the most. And I just want it. There's there was
26:52
Speaker 1: a phrase you used in there that I just want
26:54
Speaker 1: to grab for a second. It was not just that
26:57
Speaker 1: it's easier to see the doctor. It's easier to see
26:59
Speaker 1: the doctor for the patients that need it the most.
27:02
Speaker 1: That's right. It seems like that's a really important phase
27:05
Speaker 1: is figuring out who those patients that actually need to
27:08
Speaker 1: see their price marycare doctor or seeing them when they
27:11
Speaker 1: need to be seen like that seems hard, Yeah, and
27:16
Speaker 1: that is where the technology comes in. My father in
27:19
Speaker 1: law was CEO of a health plan and before that
27:25
Speaker 1: he had started one of the health insurance company health
27:28
Speaker 1: insurance company, and before that he had started one of
27:31
Speaker 1: the first HMOs in the country. And he said to me,
27:35
Speaker 1: as far as how's this different than what we did
27:37
Speaker 1: fifty years ago? And I showed him our our technology
27:42
Speaker 1: and he was like, Okay, that's what's different. So how
27:45
Speaker 1: does it actually work? So how does it work that
27:48
Speaker 1: a doctor knows what patients they actually need to see
27:51
Speaker 1: or need to be available for. Yeah, so nine of
27:56
Speaker 1: our practices use our platform, our software platform every day. Yesterday,
28:05
Speaker 1: our practices were in the tool and what they do.
28:07
Speaker 1: When you log into the tool, the first thing you
28:09
Speaker 1: see is you had three patients who went to the
28:13
Speaker 1: emergency room yesterday, and we think that within forty eight
28:18
Speaker 1: hours you should call them. And here's here's the tool
28:22
Speaker 1: that helps you call them and you can now send
28:24
Speaker 1: them a text message. And just to be clear, like
28:28
Speaker 1: most doctors when their patient goes to the emergency room,
28:32
Speaker 1: how do they find out or that they don't They don't.
28:36
Speaker 1: They don't they don't because how would they be right?
28:39
Speaker 1: It's just like how would the doctor is over here
28:41
Speaker 1: in some clinic and then the patient is just driving
28:44
Speaker 1: to the emergency room or whatever getting driven to the
28:46
Speaker 1: emergency room, and they're like separate islands exactly, even when
28:50
Speaker 1: even when the doctor's part of the same system as
28:53
Speaker 1: the emergency room, there's no system to inform them, there's
28:56
Speaker 1: no system to call the patient. There's no system for that.
28:59
Speaker 1: Why because there's no incentive to do that. Yeah, nobody
29:03
Speaker 1: gets paid more to if they do that, And now
29:06
Speaker 1: there is, and now there is. Right, So that's that's
29:10
Speaker 1: one of the things you'll see. The other thing you'll
29:12
Speaker 1: see is you'll see it that says, hey, you know what,
29:15
Speaker 1: here's a list of patients who you haven't seen in
29:17
Speaker 1: a while, who you know they might need your help.
29:19
Speaker 1: They're pretty got pretty complex conditions, or their last blood
29:23
Speaker 1: pressure was pretty high or whatever. Right, here's a list.
29:25
Speaker 1: But you don't need to worry about that. Here's a
29:27
Speaker 1: list of patients for your scheduling person, the front desk
29:30
Speaker 1: person between patients. When she's got a few minutes, she
29:33
Speaker 1: should call these patients and make an appointment for them
29:35
Speaker 1: to come back into primary care. Right, So that's the
29:38
Speaker 1: wellness work Listen, when they come in once a year,
29:41
Speaker 1: like let's have a visit. That's not based on you
29:45
Speaker 1: reaching out to me because you've got something wrong with you.
29:48
Speaker 1: But once a year, let's have a visit where we
29:50
Speaker 1: can just sit and we can talk, and we can
29:51
Speaker 1: see how do we keep you healthy? What are the
29:54
Speaker 1: things that are going to be problems for you and
29:56
Speaker 1: prevent them? And you've found that it's profitable under this
30:00
Speaker 1: new system to do that. The practices make about fifty
30:05
Speaker 1: percent more per Medicare patient who's in these models fifty
30:12
Speaker 1: percent more, and they're they're like scrapping and begging for
30:16
Speaker 1: like a two or three or four percent rate increase,
30:19
Speaker 1: and they're getting a fifty percent increase through this model.
30:23
Speaker 1: And is allidate's business model to take some chunk of
30:26
Speaker 1: the additional Medicare pay basically that the doctors get. Is
30:32
Speaker 1: that the model, that's the model. The model is we
30:35
Speaker 1: only get paid when the practices get rewarded and the
30:38
Speaker 1: government saves money. Are the practices on the hook if
30:41
Speaker 1: their patients wind up costing medicare more than expected? Great question.
30:47
Speaker 1: So we do start with what's called one sided models,
30:51
Speaker 1: where it's it's it's like reward only, but then we
30:56
Speaker 1: move pretty quickly to two sided models and we backstop
31:01
Speaker 1: that risk for the practices. So so you take the
31:04
Speaker 1: you're on the hook and the practice is not on
31:06
Speaker 1: the hook. Correct. So I feel like I where you
31:09
Speaker 1: came from and where you are now, and I'm curious
31:13
Speaker 1: where you're going next, and in particular, you know, what
31:17
Speaker 1: are the things you're trying to figure out that you
31:20
Speaker 1: haven't yet cracked. We're in this in order to reduce
31:25
Speaker 1: hospitalizations and complications and bad stuff happening to patients, and
31:30
Speaker 1: we need to continue and there's so much every day
31:32
Speaker 1: I see the opportunity that we're leaving behind. Tell me
31:37
Speaker 1: more about that, I mean, and specifically when you talk
31:39
Speaker 1: about seeing opportunities that you're leaving on the table, Like,
31:42
Speaker 1: what's a specific example of a thing there you look
31:45
Speaker 1: at you're like, oh my god, we can help people
31:46
Speaker 1: and we're not doing it. What's an example of that? Kidney?
31:51
Speaker 1: Let me talk about kidney. So when someone's kidneys fail,
31:58
Speaker 1: it's a terrible thing, right where your blood is no
32:02
Speaker 1: longer being cleaned. They oftentimes it happens unexpectedly and the
32:08
Speaker 1: so called crash into needing dialysis, they get hospitalized. There's
32:13
Speaker 1: actually a big mortality rate for that when people actually
32:17
Speaker 1: die during that and never get a chance right to
32:20
Speaker 1: make it to the next stage. We can predict who's
32:25
Speaker 1: going to crash into dioss with pretty good accuracy. So
32:31
Speaker 1: because we have all of this information on the patient
32:34
Speaker 1: before upstream of when that happens in the earlier stages
32:38
Speaker 1: of kidney impairment, we can do a really good job
32:41
Speaker 1: using machine learning AI models of predicting who's going to
32:46
Speaker 1: crash into diosis. We can steer those patients because we
32:50
Speaker 1: have the primary care relationship with them. We can do
32:52
Speaker 1: a handoff from primary care to kidney specialists and kidney
32:58
Speaker 1: educators and work with the patients. And what we're seeing
33:01
Speaker 1: is at twenty four percent lower rate of hospitalizations twenty
33:05
Speaker 1: four percent for patients who've got that handoff into the
33:08
Speaker 1: kidney care management program to dialysis. And when that happens,
33:12
Speaker 1: presumably hospitalization goes down. Does mortality even go down? People
33:16
Speaker 1: die less if you do this. I haven't proven that yet,
33:19
Speaker 1: but I think it does well. So are you doing
33:21
Speaker 1: that already or is that a thing you think you
33:23
Speaker 1: can do but that you're not quite doing yet. So
33:26
Speaker 1: we have a unit that does these tests, these experiments,
33:30
Speaker 1: and then when they work, we scale them. So this
33:35
Speaker 1: is literally hot off the presses. We got the results
33:37
Speaker 1: from the pilot. It seems promising, and we're going to
33:39
Speaker 1: scale it and you can imagine like you can imagine
33:42
Speaker 1: that same sort of rinse and repeat right for a
33:46
Speaker 1: whole host of other of other things of just finding
33:50
Speaker 1: ways to be smarter about figuring out who is about
33:53
Speaker 1: to get really sick essentially, that's right exactly, and intervening
33:58
Speaker 1: either ideally to prevent them from getting really sick or
34:00
Speaker 1: at least to reduce the bad outcomes associated with getting
34:04
Speaker 1: really sick. You got it. We'll be back in a
34:10
Speaker 1: minute with the lightning round. Now back to the show. Okay,
34:22
Speaker 1: let's close with the lightning round. Okay, Um, what you
34:28
Speaker 1: ran health? I t for the Obama administration. So what
34:32
Speaker 1: is the least glamorous thing about working in the White House? Um?
34:37
Speaker 1: We had to pay for our own water like literally,
34:41
Speaker 1: what's yeah? Why? Literally we had a we had because
34:44
Speaker 1: the government is I mean, you really learn frugality. People
34:48
Speaker 1: have no idea Like in the government, we had a
34:51
Speaker 1: water club and you had to put in twenty bucks
34:54
Speaker 1: for to have the privilege of drinking from you know,
34:57
Speaker 1: the filtered water from from the water cooler. Uh, that
35:01
Speaker 1: is what you're That is the spirit of frugality that
35:05
Speaker 1: people don't understand. The government agencies have. What's why? Piece
35:09
Speaker 1: of advice you'd give to someone trying to solve a
35:11
Speaker 1: hard problem. Spend a lot of time asking yourself, what's
35:18
Speaker 1: the question? What's the what's the heart of the problem? Um,
35:23
Speaker 1: and I think you should change the name of your
35:24
Speaker 1: podcast to what's part of the problem? What do you
35:28
Speaker 1: think I should change it to to to what's the
35:31
Speaker 1: heart of the problem? Huh, you don't like it? I
35:35
Speaker 1: like I wonder about the problem framing at all, frankly
35:38
Speaker 1: as a as a as a name for the podcast
35:41
Speaker 1: I've come. I love it. I love it. I love it.
35:44
Speaker 1: That's why. That's that's that's why I love your podcast.
35:47
Speaker 1: I think it's the most important thing is to be
35:50
Speaker 1: working on the most important thing, and and we don't.
35:55
Speaker 1: We don't work on the most important thing. It goes
35:57
Speaker 1: back to that question you were talking about at the beginning,
36:00
Speaker 1: how can we save the most lives? That is that's
36:02
Speaker 1: my question, right, that's the that's that's that's the problem
36:05
Speaker 1: that I'm trying to solve. But for every every entrepreneur,
36:09
Speaker 1: what's the heart of the problem you're trying to solve
36:12
Speaker 1: and how can you how can you get to that?
36:15
Speaker 1: And what I found is people don't really don't really
36:20
Speaker 1: ask themselves and iterate enough on do I have it right?
36:24
Speaker 1: Is that really the heart of the problem is that
36:26
Speaker 1: the question what was the last hike you went on? Ah?
36:31
Speaker 1: I love hiking, and I walk on the Capitol Crescent
36:38
Speaker 1: Trail and the Ciano Canal all day. Like some days
36:41
Speaker 1: I'll walk eight hours during the workday with my phone
36:45
Speaker 1: and my tablet and my backup battery. So the last
36:50
Speaker 1: hike I did, was it a long hike on the
36:52
Speaker 1: Ciano Canal towpath? And was it, in fact a workday
36:56
Speaker 1: where you just walk in for eight hours and running
36:59
Speaker 1: your company? Yeah, that's a nice move. That's a very
37:03
Speaker 1: strong move. If everything goes well, What problem will you
37:06
Speaker 1: be trying to solve in five years hospitals? I think
37:12
Speaker 1: we've we've started where it's easier, where the incentive alignment
37:18
Speaker 1: is easier with independent primary care, and now we're adding
37:21
Speaker 1: on people around that. But particularly in rural areas, we're
37:26
Speaker 1: going to need to solve the rural hospital problem and
37:29
Speaker 1: maybe maybe maybe we can help flip them to a
37:32
Speaker 1: different model. Farzad Mosta Shari is the co founder and
37:40
Speaker 1: CEO of Allidate. Today's show was produced by Edith Russlo,
37:45
Speaker 1: edited by Robert Smith, and engineered by Amanda k Wong.
37:49
Speaker 1: I'd love to get your suggestions for who else I
37:51
Speaker 1: should talk to for the show. You can email us
37:54
Speaker 1: at problem at Pushkin dot fm, or you can find
37:57
Speaker 1: me at Twitter at Jacob Goldstein. I am Jacob Goldstein
38:01
Speaker 1: and we will be back next week with another episode
38:04
Speaker 1: of What's Your Problem.