Healthcare networks, reimagined.

Your network is everything. If you don’t have a kick butt genuine network both personally and professionally, you can only provide a fraction of your value to your friends, family, and clients.

Traditional healthcare networks are financial networks. They’re long lists of random doctors who have contracts with the insurer or the hospital group. That’s it. There’s no effort put into creating networks of doctors based on personality, mission to not overtreat/overbill, or exceptional ability to communicate clearly with empathy (The Trifecta). Quick clarification…this assumes they’ve already met the basics like board-certification, training at a well-respected academic medical center, etc. Don’t get me wrong, there are definitely quasi-financial doctor networks on the internet. There’s Yelp, created by patients to review doctors when they’re really mad or really happy. There’s ZocDoc for doctors who need to pay $3,000 a year for a steady stream of patients.

How do you even create a Trifecta Network?

I’d estimate about 5% (~30,000 in the US) of practicing doctors meet the Trifecta. I wanted to create a new kind of nationwide, doctor network because it hasn’t been done before. And I also believe this network is literally worth billions if you admit that a Trifecta doctor network could eventually become a financial network. As of today, from the last 7 years of Sherpaa’s efforts practicing nationwide and having to occasionally organize local care with local specialists, we’ve organically built this kind of network. Any one of Sherpaa’s doctors can personally reach out to them, via a text message to their personal mobile phone, and say:

Hey Dan. Hope you’re not working too hard. Hey, I have a patient here who’s been having some really weird eye symptoms and they need your services. What should I do now to prepare them for a visit with you? And can you squeeze them in tomorrow or the next day?

And because we’re sending Dr. Dan a few patients a week from Sherpaa, they text back pretty quickly. We give them something (referrals). They give us something (speedy care for our members + their mission-based care). That’s immense value to our patients and to Sherpaa. We built this network organically and it’s constantly in flux. Two weeks after we refer you, Sherpaa solicits a request from you to review the specialist/facility and ~35% of people do. If reviews aren’t up to par, we purge the specialist from our network.

Sherpaa gets paid to have a kick ass network of local doctors and facilities. We’ve made it simple for our doctors to refer you at the point of decision-making. When one of our doctors decides you need to see a neurologist who specializes in headaches, we just start searching the network we’ve built up over the last 5 years. And when we make the referral, this triggers a notification to that specialist letting them know Sherpaa has sent them a patient, a few patient details, and instructions for how to send us their consult report to be included in the patient’s “episode of care” within our app.

When we work with health plans and brokers who, over the years, have built their own local “Trifecta Network-like” suppliers, we add those specialists and facilities to our backend, tag them with the name of the health plan or employer and then leverage those local specialists/facilities when our doctors are referring those plan members.

It’s a health network for a new concept. And, as you can see, building this kind of network unlocks a whole world of future possibilities.

There’s a 3 minute wait for an Uber right now and a 3 week wait to see my PCP

When there is any type of solution out there, there’s a problem that’s been defined and some designer then created a solution to solve that problem. And when people have that problem, they hire the solution to solve that for them. So, what is the job we’re hiring heath insurance to solve for us? What’s the problem to be solved?

I think the problem Americans should hire health insurance for is protection from bankruptcy due to medical bills. That’s it. When you get sick in America and need medical care, absolutely nobody should go bankrupt. It’s literally that simple.

But, there’s a job that health insurance companies have took upon themselves to also solve for you, all fostered by the federal government. It’s one that’s far more complex. It’s micromanaging the delivery of all aspects of healthcare, from a million dollar pneumonia in the ICU to the college student’s annoying $75 strep throat. And insurance companies are absolutely godawful terrible at micromanaging all care. Even worse, they must approve of all innovations in making even basic healthcare more simple and accessible for you. Innovations in healthcare delivery typically take 10 to 20 years to be approved by the insurance companies, so our day-to-day healthcare experience has a bottleneck that doesn’t match up to what we’ve come to expect from services in America. There’s a 3 minute wait for an Uber right now and a 3 week wait to see my PCP. That’s because health insurance companies must have pilots and reams and reams of decades-long data to “prove” that something they’re going to pay for is cost-effective for them. Health insurance companies have a very simple business model: Use data from micro-managing all aspects of your care to get really good at predicting next year’s expenses and adjust your premiums accordingly. Anything that throws a wrench in the status quo disrupts this business model. So, as long as people keep paying their premiums, they’re happy to continue the status quo.

There’s a theory out there for why civilizations fail:

One day you wake up and everything around you is there to maintain complexity, and not add value.

This is the definition of healthcare in America.

If 5% of people spend 50% of costs, 95% of people spend 50% of costs. That 95% of people needs a service revolution. The experience of getting healthcare needs to be made exceptionally convenient and effective. This is goddamn America. We can build Uber, but we can’t make a primary care doctor available in less than 3 weeks?

Making healthcare equitable for people is a deep-seated philosophical belief amongst folks in the government and public health academics. They start with “everyone should have access to healthcare,” hence the focus on the individual mandate in Obamacare. But without a concomitant “health insurance companies should be lazer-focused on quickly getting an uber-like efficiency to making care accessible,” we’re shooting ourselves in the foot. Equity at the expense of innovation is a losing battle. And this means in America “equitable” means everyone should have access to 3 week waits for primary care doctors and $36,000 ER visits. There’s an assumption out there amongst public health academics that if you make healthcare too expensive to access (like make that college student pay $75 for a strep test), people will put off care and then they’ll die. I believe that, especially when you make going to the doctor painfully worse than a trip to the local DMV. But if you make the majority of healthcare simple and accessible and as efficient as getting an uber for 95% of Americans, you can make healthcare far more equitable. That starts with freeing up healthcare deliverers to innovate on their own accord and compete based on price and experience. Fostering service innovation should be far more important than equity. Open up the innovation flood gates and equity will soon follow.

In an era of skyrocketing healthcare costs, how do you make care more affordable?

Making a doctor’s care affordable has been a dream of mine for the last 10 years. And I strongly believe that redesigning how healthcare is delivered and injecting some technology into that process will make healthcare more affordable over time.

Today, a visit to a primary care doctor costs a little over $200 (co-pay + the bill you get later) and an urgent care center is $350. Why is this so expensive? Overhead. Most doctor’s practices have 3 to 4 support staff per doctor. These are people like nurses, billers, receptionists, office managers, etc.. And then all the infrastructure you need to bill insurance companies is not cheap either. And then malpractice. And rent. And so on. A typical doctor’s practice is ~70% overhead.

When I founded Sherpaa 5 years ago, I looked at a traditional doctor’s practice and asked why in the hell does it have to be this way?

A 5 doctor Sherpaa practice has no brick and mortar and one medical assistant to support our doctors’ minute-by-minute needs. Our overhead is a tiny fraction of a traditional practice.

We have to pay our doctors’ salaries and their malpractice. And I believe streamlining our operations is maybe 20% optimized so far. The tech platform we’ve built to power our practice is laser-focused on analyzing time-intensive things our doctors do and automating them. We’ve already automated ~80% of asking questions of patients and ~80% of communicating a diagnosis and the treatment strategy going forward. When the primary means of communicating with our patients is text as opposed to real-time oral conversations, you can streamline things in a way a doctor in a traditional practice could never do. We’ve got a long way to go, but compared to a traditional practice, it’s just a fundamentally different beast.

People in their 20’s, 30’s and 40’s typically don’t have monthly medical needs. They may go 9 months between needs. But when they do, it’s typically an urgent issue and they need a super accessible go-to. The concept of unlimited care for a flat monthly fee is meaningless to this type of person. And seeing a $25 or $40 a month membership fee for unlimited care every month could be annoying, despite that fee being the equivalent of one urgent care visit, just paid for in monthly installments. I get that. So, now, instead of the cost of a nice monthly dinner hitting your card every month, Sherpaa is the cost of Netflix. And because refills and recommendations for referrals take us very little time, that’s included in the membership. All we can sell here at Sherpaa is our doctors’ time, and, in the spirit of our mission, our goal is to constantly streamline our doctors and make care as affordable as we possibly can.

I’d really appreciate your support and our doctors would really appreciate the opportunity to care for you. If you haven’t yet done so, please join Sherpaaand support healthcare innovation. Remember, it’s on us to innovate our way out of this healthcare mess.

Health Insurance Companies Should Stop Stifling Innovation

One thing’s for sure — deductibles are on the rise. Just like when you get into a car accident, you’ve got to spend your deductible and then your car insurance starts covering the repairs. Except, when you’re getting your car fixed, you can get multiple estimates and shop around based on price and quality. In healthcare, it’s nearly impossible to get a cost estimate up-front for something as simple as, say, putting tubes in your kid’s ears.

This didn’t matter so much just a few years ago because deductibles used to be a few hundred dollars. But now look at what’s happened:

The above numbers are employer-sponsored plans. But let’s look at Obamacare plans:

Deductibles are skyrocketing. But here’s the issue — you can only spend your deductible on things your health insurance approves at rates they’ve set. Now, a health insurance company’s only job is to predict next year’s expenses and adjust your premiums accordingly. That is the core of an insurance company. And as long as you and/or your employer keep paying your premiums, they’re happy to continue the status quo. Their method of controlling costs is to negotiate rates for expensive services, typically with hospitals and large physician groups in expensive specialties. One long stay in an ICU can be $2M, which is ~7,000 urgent care visits. They don’t care so much about negotiating costs for relatively inexpensive things like urgent care centers and MRIs.

But they want to force you to spend your hard-earned out of pocket money on things they don’t prioritize as part of their business model.

This practice stifles innovation and competition because you can only spend on approved, in-network services. And doctors and hospitals are still billing as if you have no deductible and insurance companies are paying everything for you. For example, a radiology center is not competing with others based on price and billing you a smaller amount because you haven’t yet spent your deductible. They’re billing you the same ridiculously high amount they’d bill your insurance company. And insurance companies have made this concept “illegal” in the contracts they have with the radiology center. According to the contract, the radiology center must bill you and the insurance company the same price.

Your deductible is your own hard-earned money and insurance companies are not allowing you to spend that on services that compete based on value, convenience, and quality. There should be an entire healthcare market out there competing for your dollars based on convenience, quality, and cost. Insurance companies neglect to admit that if you spend $1,000 instead of $5,000 of your deductible, that’s a huge value-add to you. It’s the difference between going on a lovely vacation, or not. And as long as it doesn’t hit their expenses by you spending all of your deductible, it’s not a problem they want to help you solve.

Insurance companies meddling and mandating involvement in your entire deductible spend is massively stifling innovation as companies like Sherpaa are arising trying to fundamentally change your healthcare experience. The IRS defines what you can spend your FSA/HSA dollars on. Insurance companies should allow this same set of healthcare services and products to apply toward your deductible, whether they’re in-network or out-of-network in order to foster a competitive landscape for your deductible spend.