Sherpaa vs The Others

Sherpaa doctors ask themselves two questions:

Can I diagnose and treat this issue by asking the right questions ordering the right tests, and following up with you? If I can’t, how can I best coordinate your care, refer you to the right person/place, and follow up with you?

A 12 minute office or video visit is one small snapshot in time. Health issues evolve over time requiring new updates and confirmation that you should stay the course or change strategies. You wouldn’t solve problems at work with 12 minute meetings every few weeks with your team. It’s about time we expect doctors to work with us and solve problems like we do at work and at home.

We should measure health innovations based on how much they can do and how effective they can be.

An interesting metric to understand the effectiveness of a new kind healthcare service is the raw number of diagnoses that service can diagnose, treat, and manage.

Retail Health Clinics

The list is small and the conditions are simple, like pink eye, allergies, and poison ivy. They are 30 or so issues that can be diagnosed via protocols, simple tests, and nurse practitioners. By design, to protect themselves from liability, they are limited in scope.

Number of conditions they treat: ~30

Video Telehealth Visits

Video-based physicians have a similar, yet different scope of illnesses they can diagnose. These are diseases that share two characteristics:

  • They do not need tests to diagnose
  • They are quick fix, simple illnesses where a “one and done” interaction suffices

Also, due to process and liability issues, they have limited capability in safely diagnosing and treating. They also have no way to follow up with you to see if their treatment was the right treatment. With no way to follow up and understand outcomes, there’s no way to measure quality. And what you can’t measure, you can’t improve.

Number of conditions they treat: 20 to 30


Sherpaa routinely manages just shy of 500 conditions. From pink eye to asthma to care coordinating an acute appendicitis, Sherpaa is in a different category. Why?

Reason #1. Our communication happens more like email allowing us to manage an issue over time. Say we don’t know the exact diagnosis at this second, we can say, “hey let’s connect in 2 hours to see if your abdominal pain gets any better or worse.” If our docs suspect it’s just gas, but have a low suspicion it could be appendicitis, we can give it some time to see how things evolve. So our docs proactively reach out to you in 2 hours to follow up. Because traditional doctors and video visits are 12 minute snippets of time without the ability to follow up at any time, they are forced to make knee-jerk reactions.

Reason #2. We order tests. If we want to rule out pneumonia, we send you for a chest x-Ray. If we want to diagnose thyroid issues, we order blood tests. We get the results and we diagnose and treat and follow up. Twelve minute video visits can’t do this.

Reason #3. We are always a message or phone call away and we follow up. This gives our doctors unprecedented comfort in their management. For example, if you are discharged from the ER and 2 hours later something changes, good luck trying to get a hold of that ER doctor. With Sherpaa, we always have a direct communication line to you, just as your friends can always reach you via text. And in every single case we have, we follow up with you to ensure your issue is resolved. If there is no change or you are worse, we reassess and determine your next course of action. We’re constantly measuring this, so we can always improve.

Reason #4. A case can last 10 minutes to 10 months. All of the activity that happens on your case is documented and available to you and our docs, including all the messages, the data, and the consult reports from specialists. This way we can handle both acute and chronic issues. Video visits with random doctors are unsafe for managing chronic illness.

Reason #5. We’ve built out a network of roughly 4,000 specialists, radiology centers, ERs, and urgent care centers in the states in which we operate. This allows us to quickly find the best specialist or facility to refer you to who knows what Sherpaa is and will communicate directly with our docs to work with us on your care.

Reason #6. Our doctors collaborate offline about confusing cases. When a weird case comes in to Sherpaa, our doctors will talk about it offline and then decide together next steps and then get back to the patient online. Practicing as a traditional doctor is actually quite isolating. It’s typically just you and a patient. Multiple doctor brains deciding together about one case is far safer, more effective, and allows us to do more.

Reason #7: We maintain continuity. We don’t have a large bank of anonymous doctors you’ll statistically only talk to once. Our patients are assigned to small doctor groups so you’ll always be talking with your same group of small doctors. This is safer and more effective.

The breadth of diagnoses Sherpaa can manage puts us in a totally separate category than traditional telemedicine and retail health. We’re quite proud of that.

One Medical = Blockbuster. Sherpaa = Netflix.

One Medical announced today that they raised $65M bringing their total funding to roughly $180M over the course of 8 years. They are operating in 6 cities: 23 offices in the San Francisco area, 6 offices in NYC, 1 office in Boston, 2 offices in LA, 1 office in Chicago, 3 in Phoenix, and 4 in DC.

Sherpaa was founded in February 2012 selling directly to employers. One Medical started direct to consumer and then launched to employers in 2014 effectively becoming Sherpaa’s competition.

With $180M, One Medical has expanded to 6 cities and 150 companies in 8 years. With $8M of investment and 4 years of operation, Sherpaa has expanded to 150 companies and 23 states. We will be in roughly 48 states (roughly 20,000 cities) by the end of Q1 2016. When Sherpaa launches in a state, we turn the state on to all employees living in that state, not just the employees within convenient driving distance of a One Medical office. One Medical is following the Blockbuster model building out brick and mortar offices while Sherpaa is following a Netflix model, a service powered by technology rather than real estate.

One Medical’s business model is traditional fee-for-service primary care supplemented by a yearly membership fee paid for by either an individual or their employer. Traditional fee-for-service healthcare makes money by maximizing the number of visits they can bill insurance for. Primary Care is not lucrative. They barely scrape by. And really the only way for primary care practices to make money is by charging a membership fee. And with that membership fee, you can use that money to make your office look nice, which One Medical does very well, and build apps that enable their members to make appointments. But, by far, the primary source of revenue in traditional fee-for-service practices is billing for the maximum number of office visits. It’s that simple.

So, One Medical is in a dilemma— every time they prevent a visit via an email or video visit, they are eating into the profitability that comes from their yearly membership fee. Their “innovation” was the primary care membership fee enabling nice offices and an app, but that innovation also forces the same disincentive found in traditional primary care— the more you do in the office the more you get paid. And the more you prevent, the less you get paid. That’s the same tired model found everywhere in American healthcare. That disincentive is the same reason why One Medical economically can’t decrease enough claims within a company to see positive health savings.

At Sherpaa, we never see you in person. We communicate with you via our app, order blood or imaging tests to confirm the diagnosis, and treat. We don’t get paid by employers for each visit we do. We get a flat rate from our employer clients. No matter what we do, we get paid the same removing the incentive to do the most care to make the most money. After 4 years of Sherpaa, we’ve consistently seen that 70% of primary care cases can be diagnosed and treated without needing an in-person office visit. And since Sherpaa is paid for by the employer, we don’t bill insurance companies, which means 70% of a company’s primary care claims do not happen. This also means that 70% of traditional primary care and One Medical’s office visits are unnecessary, but they make you come into their offices because that’s how they get paid.

Since Sherpaa began, we’ve been able to sign bigger contracts with bigger companies. And as companies become larger, they have a higher tendency to have offices scattered all across the country in places like NYC, SF, Tennessee, Dallas, and West Virginia. We’ve also learned that the vast majority of large companies will not purchase an employee benefit if that benefit can’t be offered to all employees, no matter where they are geographically located. So the company that’s based in NYC but has an office in Virginia and Tennessee won’t sign up for a service that can’t do business in those three states. This puts a service like One Medical in another dilemma. Because they have to build brick and mortar practices in every city and every state, and those practices must be conveniently close to a potential patient, and patients must be willing to switch to One Medical from their primary care physician…it’s a long Blockbustery, expensive road ahead to satisfy the needs of large, important companies. Just because I live in “Chicago” doesn’t mean I’ll travel 30 miles downtown to a well-decorated primary care office. It’s like forcing all of your employees to rent all their movies from one Blockbuster.

Any healthcare system is composed of resources capable of solving problems, like primary care doctor offices, emergency rooms, and specialty hospitals. Here in America, we’re fortunate enough to have the market freedoms to create new, innovative services and see how they fit into today’s landscape of healthcare services. But how capable are these new services and where do they fit on the spectrum of ability to diagnose, treat, and coordinate care effectively?

Tier One: Academic Medical Centers. At the top is obviously the Mass General’s, the Johns Hopkins, the Columbia Presbyterians and their top notch, cutting edge diagnostic and treatment capabilities. It’s obvious here, there’s simply nothing better in resources and capability.

Tier Two: Community hospitals. Although not as capable as large academic medical centers, they are extremely valuable for the majority of medical issues, because the majority of medical issues are bread and butter typical run of the mill problems that need typical solutions by competent local community doctors.

Tier Three: Urgent Care Centers. These are relatively low cost diagnostic and treatment centers for bread and butter acute issues that aren’t going to need hospitalization to solve. These are great. They increase access to medical expertise but aren’t as expensive because they lack the overhead of big hospitals.

Tier Four: Specialist offices. For non-acute issues, specialist offices give people access to highly specialized diagnostic and treatment care for issues that can be treated outside of the hospital via scheduled appointments with specialists in their offices.

Tier Five: Sherpaa. Sherpaa is higher in capability than traditional primary care doctors for a few reasons. First, the combination of phone, messaging, photos and an activity stream of your case allows us to better stay on top of the multitude of updates and evolution of your situation much better than a doctor who’s restricted to communicating with you strictly via a 12 minute office visit. Second, our doctors communicate with you, order tests, get results, diagnose, treat, and prescribe— when they deem appropriate. But when you need to be seen (this happens roughly 30% of the time), we know exactly who you need to see. We make a referral and coordinate your care throughout your next steps with local specialists and facilities. While Sherpaa doctors never see you in person, this is actually a feature, because we don’t have to see you in person to understand that you don’t need our services, you need a specialist or something else higher in capability. So Sherpaa serves not only as primary care doctors but also as care coordinators. We can do this because our communication happens more like email and is presented as an activity stream with status updates, test results, specialist consults arranged in chronological order. Health issues are stories that evolve over time and there is simply no better way to keep up to date and arrange care than this kind of communication. This means every scenario that’s filtered through Sherpaa is the most appropriate use of healthcare. This also means that 70% of traditional primary care visits are unnecessary and do not need to be seen in person.

Tier Six: Office-based Primary care doctors. They are great for in-person meetings for things that require generalist regular in-person physical exams where photos and online communication won’t suffice. They need to see you first to determine that you need something higher in capability leading to marked inefficiencies and expenses in healthcare. The process of primary care is broken, inefficient, and inconvenient and it would serve them well to communicate normally with people rather than restrict themselves to the appointment-driven, 12-minute visits that need to be scheduled 3 or 4 weeks in advance. That kind of communication was invented thousands of years ago and hasn’t been updated. And the business model of primary care means doctors get paid more for doing the most visits. The more you come into the office, the more money they make. This encourages volume and quality is sacrificed. As you can see, today’s version of traditional primary care, if it does not evolve, will be left behind.

Tier Seven: House Call doctor. House call doctors fall victim to the same limitations as traditional primary care visits above. Again, 70% of their visits are unnecessary and should be handled with online communication and photos. But office-based PCPs have access to more tools and tests in their office than what they can carry in a bag and are therefore more capable than house call doctors. House calls are a logistical nightmare and about 30% as efficient as an office-based doctor, making this an irresponsible use of physician time. House calls will never scale and will never be sustainable outside of the market that’s willing to pay $600 out of pocket for a doctor to come to them. 

Tier Eight: Retail health clinics. These are good for simple issues that don’t need a doctor’s expertise and can be diagnosed with conversation, a physical exam, and simple CLIA-waived tests like rapid strep tests. These are issues like pink eye and poison ivy and about 18 others. Because nurse practitioners are restricted in ability and each require physician oversight when diagnosing outside of standard protocols, they are massively restricted in capability. However, because they can see you in person and do tests, nurse-practitioner led retail health clinics are higher in capability than physician video visits who can’t lay hands on you or order tests. Both retail health clinics and physician video visits diagnose and treat the same 20 to 30 simple illnesses begging the question, why are doctors doing a nurse practitioner’s job?

Tier Nine: Physician Video Visit. These are good for the same simple issues as retail health clinics that can be accurately diagnosed with only a conversation and no follow up. Since you’re always talking to a random doctor, they can’t/don’t order tests and follow up to see how the situation evolves and take next steps. Because they can’t physically examine you and order tests, video visits treat the same scope of illnesses that nurse practitioners do in retail health clinics found in your local Walgreens. They are very low in the breadth of problems they solve and, because they face similar 12 minute conversation restrictions, they are communicating and solving problems just as poorly as traditional office-based physicians. All they see is a 12 minute snapshot of a real life story that’s evolving over time and have no way to see if their intervention worked or did not work.

Tier Ten: Nurse triage lines. These increase access to nursing care, but given their issues with liability, their final recommendation is almost always, “it’s best to see your physician about this” leaving you somewhat more knowledgeable about your situation than without the call. However, they are trained professionals and therefore probably better than Dr. Google.

Tier Eleven. Dr. Google. When people have a health issue, the first thing they do is google their symptoms. Some information on the Internet is wonderful. Some is sketchy. And the old cliche is that with everything you google, you end up thinking you have cancer. Online health information works best when it’s filtered with you by a health professional sharing what he/she thinks is most relevant for your case.

Why there’s no Uber for Healthcare

Back in September 2007, I created a new kind of doctor practice as shown in the screenshot up there. The iPhone had come out three months prior (but the App Store hadn’t launched yet) and Google enabled you to embed your Google Calendar in a website just the month before. I saw a perfect storm of technology leading to an opportunity to do something unprecedented and become my own boss. As an amateur photographer plugged into the creative community of NYC, many of my friends were uninsured artists and freelancers who occasionally needed healthcare. They couldn’t afford to go to the ER and there were no urgent care centers in NYC at the time. They needed an accessible, cost-effective doctor. So, I became a doctor entrepreneur fresh out of residency armed with new technology and a mission to make doctors more cost-effective and accessible.

My idea was perfect for the promise of the mobile internet and it was the first of its kind. People would visit my site that I built with Apple iWeb, and read my credentials and mission. If they liked what they saw, they’d click “Make an Appointment” which would bring up my embedded real-time Google Calendar where they’d choose a time, explain their symptoms, attach a photo, and their apartment’s address that had to fall in the zipcodes of Williamsburg or Greenpoint, Brooklyn. This was all done via a secure form that was configured to send me an email when I had a new patient. When my fancy new iPhone alerted me of a new patient, I’d do an old-fashioned housecall.

On September 27th, after investing $1500 of my own money into this new venture, I launched my practice. Within an hour or two, Seth Godin linked to my site, prompting Gawker to write two posts about me that day. Within a month, 7.5 million people visited to see what all the commotion was about. Fox News, NPR, GQ, Esquire’s Best and Brightest of the Year, TED, Clinton Global Initiative, MSNBC, CBS Nightly News…there was a lot of press. I’d say it was the first and only doctor practice to go viral. Due to the press, my practice was almost immediately full. I was busting my ass traveling all over Williamsburg and Greenpoint. I was walking, riding my bike, or taking cabs trying to see as many patients as possible while also gathering the supplies I needed. I knew I needed those supplies because I designed the process so the patient would explain their issue in the secure form they also used to schedule the appointment.

Here’s how I spent the day. I’d wake up and hope that I got a few early appointments during the night. I’d read their stories and then email them to arrange the housecall. If I needed to draw blood, I’d ensure the right supplies were in my doctor bag. If I needed vaccines, I’d have to swing by the pharmacy to pick up the vaccine. If I had to draw blood, I’d have to drop that off to be picked up. If I knew a housecall wouldn’t solve the problem, I’d email the patient with a referral recommendation and a reason why. I could do all of this while traveling, which was increasingly being done by cab so I could communicate and travel.

My mission from day one was to be affordable for patients. I charged $100 per visit payable via PayPal. I did not take insurance because I needed immediate cash flow and couldn’t wait 4 months to be reimbursed a fraction of the bill. My expenses were cab fare and the $30 or so per month I paid to the various web services that were powering my practice. I designed my practice to be as low-overhead as possible. Compared to a traditional doctor’s overhead of roughly 70%, mine was essentially free.

It was classic disruption…a new idea, a lower cost, and not as good as a traditional doctor office visit where they have access to all their tools that won’t fit in a tiny doctor bag. Or so I thought.

The practice wore me down both physically and financially and therefore psychologically. And I’m a doctor. I’m used to working 70 or 80 hours a week. But here’s why my own business started with my own brain, sweat, and money wasn’t sustainable for me:

  • Shlepping my ass through the NYC cold and snow all day, every day was grueling
  • The travel time between patient apartments and back to my apartment or the pharmacy to pick up supplies and refrigeration-sensitive vaccines limited me to only being able to see a max of 8 patients, or $800, a day
  • I was a professional and hearing about other doctors working in warm offices and getting paid double was more than enough to make me second guess my daily grind
  • I witnessed firsthand how limiting the housecall was vs. an office visit
  • 50 to 60% of my day was spent on supply logistics and traveling between apartments in two neighborhoods, not seeing patients
  • Knowing, in the back of my head, how financially valuable my time was and how much of a financial sacrifice I was making to be my own boss, especially when I was coming off a Johns Hopkins resident salary

My practice was ridiculously fun. The neighborhood knew me because they’d seen me on the internet. I’d walk past someone on the sidewalk, somebody I’d never met before, and they’d say “Hi Doc.” I had many patients I’d seen on the internet who are now legendary musicians, comedians and artists headlining at places like Radio City Music Hall. But despite all the fun, it was just so much a grind that it reminded me of my 20 hour days in residency. At least the hospital where I did those 24 hour shifts was warm and dry. And I was 30 and I just needed a break.

Although I wouldn’t change a thing, I quickly realized that this wasn’t something that should exist beyond a cute, little, self-made practice a young punk, anti-establishment, “do what’s right for the patient” kind of doctor should spend a few months doing. It was $1500 and 7 months well spent. But primary care doctors are a dying breed. We need all of them we can get and we need them to be safely seeing a maximum amount of patients per day. We need to optimize their realistic daily processes and make them markedly more efficient. Every second the doctor is not seeing patients is wasted time. Doctors already spend roughly 40% of their day documenting and doing other administrative tasks. To waste the other 50-60% of your day traveling between patients is a 50-60% reduction in efficiency. Short of teleportation, the doctor house call will always be an irresponsibly massive reduction in primary care efficiency. Patients need us now more than ever. Our “System” is composed of 75% specialists and 25% generalists. In contrast, the UK and Canada and other high performing healthcare systems have 75% generalists and 25% specialists. And for the last decade or so, only about 10% of residents are choosing primary care further contributing to a massive primary care shortage. Traditional primary care doctors can see 30 or so patients a day in their offices. House call doctors can see 7 to 8. Even with a 20% increase in house call efficiency, house call doctors could see a maximum of 10 patients a day.

House calls are not only unscalable for an absurd litany of reasons, especially outside of hyperdense NYC, they’re irresponsible for the System. But it boils down to two issues: it’s ridiculously inefficient and very, very few doctors will actually want this kind of life. I do think they should exist as a ridiculously expensive option for people who don’t care about money, because America. But the VC subsidy will run out shockingly fast and doctor house call visits will no longer be a massively VC-subsidized $29, they’ll be more like $499 or $599. And a shockingly small number of consumers will pay that amount for their pink eye. For example, it’s about the same amount of people willing to spend $499 on a cab to JFK. Also, zero health insurers will reimburse $499 for pink eye treatment. But to think house calls are scalable, a worthwhile VC investment with anything close to 10x returns, and something as revolutionary as the real Uber is as naive as I was 9 years ago fresh out of residency doing something new, weird, and fun. Nine years ago, I spent $1500 to figure out it wouldn’t work, far less expensive than the $30 million or so being spent today to figure out the same thing. And it’s doing a massive disservice to our System. We need all the doctor efficiency we can get, which is why Sherpaa’s mission is to reduce as many unnecessary doctor visits as possible. We don’t send our doctors to see you in your apartment to look at your pink eye. You just take a photo of your eyes, tell us your story, and we diagnose pink eye. Over the internet. Why? Because it’s 2015.