Telehealth vs. Direct Primary Care vs. Virtual Primary Care

If you’re a broker, benefits consultant, or independent TPA, it’s important to understand your clients’ options for increasing healthcare access for employees. Accessing healthcare appropriately and cost-effectively is wildly difficult for people. They’re sick or hurt and scared. Changing behavior so people use healthcare intelligently isn’t easy, especially when people think they need a doctor fast and default to the ER or urgent care center or go directly to a specialist for care. And the second they step foot in the healthcare system, the system attempts to bill them as much as they can.

Over the last 15 years, a few concepts have evolved as options to streamline access to care and attempt to save money for companies and individuals. Here’s a quick overview of the top 3 primary care innovations.


Examples are TelaDoc, MDLive, and Doctor on Demand. They are 10 minute phone or video conversations with a random doctor. There is no ongoing care from the doctors throughout the illness, they can’t order tests to confirm suspicions, and, therefore, they are restricted to simple diagnoses like pink eye. However, they are typically bundled into a health insurance plan. So they’re free or very close to free ($1 per employee per month). They’re free because usage is low and their ability to solve most health issues, especially the expensive ones, is severely limited.

Cost: Free or $1 per month per employee + employee pays $49-$79 per 10 minute visit

Usage: 2–3% of employees leverage these services

Biggest Deficiency: Compared to an in-person PCP, they can only safely diagnose ~30 simple issues

Advantages: Simple conditions can be treated inexpensively

Direct Primary Care

Independent primary care doctors in brick and mortar practices are opting out of working with insurance companies and contracting directly with employers or individuals to offer their services at a fixed price. There are an estimated 600 direct primary care physicians in America. Some of them have recently banded together and formed a direct primary care network to counteract their biggest deficiency— when a company has employees scattered geographically, a neighborhood-based brick and mortar practice is irrelevant to most employees. They typically cost ~$70 per month per individual. These fees buy same day access to these PCPs and the ability to email and text with the doctors.

Cost: ~$70 per employee per month for unlimited, free care for employees

Usage: High for employees who live or work close to the practice

Biggest Deficiency: Expensive + Neighborhood-based practices do not scale for larger geographically widespread companies.

Advantages: Personalized, high quality care for employees with access to the practice

Virtual Primary Care

Sherpaa is an online medical practice staffed by full-time primary care doctorsavailable anywhere in 49 states (not Arkansas) and accessible 24/7/365. Employees always work with the same doctors throughout the illness and these online doctors can order tests and diagnose and treat ~70% of health issues presented to them without an in-person evaluation. For the other 30%, Sherpaa’s doctors coordinate care with vetted local, in-network specialists or facilities known to offer care at non-exorbitant prices. Because Sherpaa doctors understand exactly what’s needed, referrals and care coordination is extremely targeted and always appropriate. For the 30% that needs to be evaluated in-person, here’s how Sherpaa refers:

  • 55% go to specialists
  • 30% go to an urgent care center
  • 5% need a retail clinic
  • 5% need a PCP
  • 5% need an ER

Over the last 6 years, we’ve found that if an online PCP cannot solve a problem virtually, it’s highly unlikely an office-based PCP would be the most appropriate professional to solve the problem. In other words, adding an office to a PCP makes them only marginally more effective than an online PCP. This makes sense as you consider how many times PCPs send patients to specialists after they realize the patient needs expertise beyond their capacity. This means that Sherpaa scales primary care and cost-effective care coordination to all employees, anywhere at any time.

Cost: Employers either pay-per-online visit, cost-share with employees, or cover the entire cost of care at $20 per employee-user per month

Usage: When employers cover the entire cost of care, 50–70% of employees use Sherpaa over the course of 12 months

Biggest Deficiency: Getting care online first is a new behavior and employees need education.

Advantages: Sherpaa scales accessible, effective primary care treatment and bespoke cost-effective care coordination for any employee anywhere. And it’s not nearly as expensive as DPC.

What do doctors of the future want?

When I designed Sherpaa over 6 years ago, I wanted to create a new life for doctors. Even though all of our doctors are employed by Sherpaa, I’ve always viewed them as Sherpaa’s customers just as much as I think of our patients as customers. If you don’t have happy doctors, you can’t have happy patients. It’s that simple. So, with that in mind, we set out to address the challenges traditional PCPs face in the outside world. Here’s how we did that.

Doctors simply want to care for people in the best way they can imagine and make a living doing that.

They want to communicate effectively with people, get at the problem, treat it successfully, and get confirmation they’ve solved problems. In order to do this, you have to redesign how doctors communicate with patients. If doctors and patients can communicate with each other as simply as an email or a phone call, doctors can know their intervention is working and patients can reach out with updates that may or may not change the strategy. When a patient steps out of an exam room, traditional doctors do not have an easy way to understand how the patient is doing. That’s a terrible and frankly unsafe process. Most importantly, both a doctor and a patient must have the ability to initiate communications from anywhere at any time.

Doctors do not want to deal with the business side of things

They just want to show up, simply care for people, and get paid. Doctors are not trained to deal with accounting and the operations of a business. So don’t expect them to be anything more than just doctors. Sherpaa doctors know what shifts they have to work, and they log in and care for patients. If a doctor will be late, they text one another asking for help with coverage. All of the doctors look out for each other. It’s a true team that, together, built a functioning new kind of 24/7 practice. This is their baby and they care for it. And they are completely shielded from the operations of Sherpaa.

Doctors want professional support

I thought practicing medicine, one-on-one with patients, was pretty lonely. I also felt that, if I didn’t know what was going on, I had to wing it as best I could. I couldn’t, in real time, ask other doctors to poke in and help me figure something out. And the interactions you do have with other doctors is often quick conversations in between patients. By no means is primary care a team sport. I thought that was wrong and needed fixing. So, with Sherpaa, in complicated cases, the doctors flag weird cases and ask other Sherpaa doctors for help. So, patients get second opinions baked in rather than the opinion of a solo doctor. And, since they’re all working together in a room, when complicated situations arise, they talk amongst themselves, gain a consensus, and one of them then gets back to the patient. There’s safety in numbers with quality assurance baked in.

Doctors want flexibility

The internet has enabled so many people to work from wherever. Doctors, too, want the flexibility to work from wherever when it’s convenient for them. Sherpaa doctors work in 8 hour shifts, from 8am EST to 4pm EST and 12pm to 8pm EST. Most of the time, the doctors are working together in the same space. But, one of our doctors has a summer home in Maine and she works from Maine all summer long. Another one of our doctors is married to a man who lives in Vienna. So, 6 months out of the year, she’s treating patients here in America from Vienna. And nearly every one of our doctors are women, often with young children. They want to continue being talented doctors, but also want the opportunity to spend more time with their children. If a doctor is tied to a physical office, they simply could not lead these diverse, unique lifestyles.

Doctors want meaningful connections

Our doctors are always asked “don’t you miss seeing patients?” While it’s very true that our doctors never see our patients in person, our doctors still develop relationships with people over time. When you’re always working with the same doctors, you get to know each other. It’s not in the “I can look in your eyes kind of way,” it’s more that we’ve written to each other back and forth so much over the last 2 years that I understand what motivates you and what you’re looking for. And I’ve also seen that you’ve had these 12 cases and I helped you and I’m proud of what I’ve done for you and your life. There’s important meaning, even if it’s not an in-person relationship. There are also massive companies built in a decentralized way, like Github. Their employees communicate and solve problems and they don’t have to look each other in the eyes to solve the vast majority of problems. We’ve got so many means of communication available to us. Let’s use the best ones to solve problems the fastest.

Doctors don’t want to be scribes

Traditional doctors spend ~50% of their day documenting interactions with patients in their electronic medical records. When care is delivered primarily via messaging, the conversation is the documentation. That, in and of itself, makes Sherpaa doctors literally 100% more efficient than a traditional doctor.In fact, Sherpaa’s platform doesn’t allow our doctors to document anything the patient cannot see. It’s full transparency.

Doctors don’t want to do the mundane

There are three big time sucks for traditional doctors:

  • Asking detailed questions of the patient about their situation
  • Communicating the plan
  • Documenting the interaction

When doctors are taking a history, they ask the same questions over and over to each patient who presents with the same symptoms. And then patients want to best describe what’s happening, but the answers can get long-winded. Then, when doctors are describing treatment plans like what to do about your sinus infection, they’re saying the same thing to most patients. With patients asking more questions about their treatment, this takes time. Because this is an oral conversation in traditional doctoring, there’s no way to automate this. But with asynchronous messaging conversations, 90% of both of these time sucks can be automated. And once they’re automated, they can learn to be more efficient. Documenting an oral conversation has already been covered, but this automated process tackling these three areas leapfrogs traditional doctor productivity.

Doctors want technology that makes their job easier

Today’s EMRs are designed to maximize reimbursement from insurance companies. Because this is the problem EMRs solve for healthcare, this is antithetical to doctors’ wanting clear, concise, only clinically relevant information available to them in the most insightful way with the least clicks possible. Doctors are forced to use technology that makes their jobs harder. In their quest to maximize their pay over the past few decades, they’ve enslaved themselves. Paying doctors to communicate and solve problems rather than paying them for maximizing volume and maximizing things they do to patients frees them to use technology that makes their jobs easier. Here’s what an EMR looks like when doctors are paid to communicate and solve problems, rather than get paid for more office visits and procedures.

Doctors want to be part of the solution, not the problem

The vast majority of doctors are exceptional people stuck in a system that incentivizes them to do the wrong things. And because the culture of medicine teaches us from day one to not question our authorities, we get really good at following the pack. But every doctor knows the system is broken, and most do not have the resources to fundamentally change healthcare. Doctors, by nature, want to be the solution for problems. It’s in our nature. This is what I talked about in 2011. Six years later, it’s more important than ever.

The Illusion of Free is Killing Us

If you ask someone who gets their insurance through their employer how much they pay for health insurance, most people say they do not know. They sign up for a plan upon open enrollment and they never see the money taken out of their paychecks. However, the average employer-sponsored health insurance premium for a family in 2017 is $18,764.

Then, ask people how much it costs them to visit the doctor. Most answer with whatever their co-pay is. But as Chili’s pointed out last week:

Then ask them how much their deductible is. Again, most answer with crickets.

And, finally, ask them for a description of all the line items in the medical bills they get in the mail.

It’s all so complicated, so they just give up.

These are educated, extremely intelligent people working on big problems in the world.

Obamacare increased confusion by saying that preventive care via a doctor is “free” and covered by your insurance. Certain types of visits, like annual physicals and vaccines are at no cost to a person. But, doctors were able to get around this by billing for the annual physical plus the rash. And you’ll have to pay for that rash visit that just so happened to be talked about during your annual physical. So, @subtlerbutler, there’s your real answer.

Because health insurance is often provided via employers, employers frame the issue as a benefit to employees. Benefits are supposed to be “free” so employers do everything they can to obfuscate the real costs to employees.

But, the real costs for people means, because of the massive increase in the cost of health insurance and your contribution to your monthly premiums and deductibles over the last decade, your net take home pay has decreased despite a raise in your salary.

And then health policy folks are worried, rightly so, that, if doctors are too expensive, people won’t get care and put things off until they’re more serious, more expensive, and more deadly. So, they’re doing everything they can to help the employers and the insurance companies obfuscate first dollar cost as much as possible. They couldn’t bear to see a poor person have to pay $1,000 for an office visit but they’re failing to ask themselves why in the hell is that office visit $1,000 in the first place?

Co-pays and co-insurance are the insurance industry’s answer to making healthcare affordable. But that just means the cost of going to the doctor vs. the cost of receiving care are disconnected. You’ve already gotten the care and then weeks later you get billed for it. And most of the time, people simply don’t pay the bills (only 20–30% of those bills are actually collected later). Splitting up value and payment leads to massive collection problems. So, co-pays aren’t the answer. That money has to be made up somewhere no?

But there’s a bigger problem here. Employers, insurance companies, and health policy wonks are too busy obfuscating the real costs of care and not admitting to themselves that the care is what’s broken. Fix the process and payment of basic care, incentivize innovation, and drive the cost of care down to the point where we don’t have to obfuscate costs because almost instantly accessible primary care can be delivered for a tiny fraction of today’s massively inflated costs. Everyday basic primary care for everyone is bundled into the costs of $2 million ICU stays for one person. That $2M ICU stay is equivalent to 7,000 urgent care visits for the rest of us. They are two separate markedly different things with separate business models and health problems to be solved. Split them up. One’s a service for 90% of us who don’t need the ICU and this should compete on accessibility, quality, and cost. And the other is a complicated service for the 10% of us who need highly specialized, intensive care.

That literally means 90% of us could have the best healthcare system around for the vast majority of our needs. And then the 10% of us who need complicated care should be 100% protected from financial ruin with care delivered by a system of specialists for a fixed price for each person.

Single payer won’t fix anything if we’re paying for the same old thing. We need two systems. One that competes on experience and cost. And the other that competes on fixing super complicated health situations for a fixed cost.Unhealthy people should no longer be looked at as cash cows. Hospitals literally salivate over people in their last few months of life. Where do you think their revenue comes from?

The Dreaded Primary Care Department

Over the last 6 years, I’ve met with 20 or so hospital systems and their executive teams to talk about Sherpaa. Here’s how it works:

An innovator finds me

A passionate innovative type (Chief of Innovation or some flavor of the sort) within the organization hears about Sherpaa and reaches out to me to learn more and, eventually, they arrange a meeting with the entire executive team for me to give them an overview of Sherpaa.

I make the pitch

I book my travel and arrive prepared. If there’s one thing I can do, it’s talk clearly and passionately about Sherpaa making the entire service sound so rational and lovely. I’ll speak for 30 minutes or so and then take questions for the final 30 minutes. It’s always “this is absolutely fascinating” followed by many questions. They’re always the same questions so my responses are buttoned up and well thought out.

I leave, the team discusses

The Chief of Innovation, along with my presentation, makes a strong argument to the executive team that the hospital system can’t continue doing the same thing. They have to adjust to the times. The execs are convinced and they invite me back for another discussion. This dance goes on for one or two more meetings. I get excited because I’ve finally found some establishment entity willing to rethink how healthcare is delivered. Then, inevitably, one of the execs, as they should, understands the politics of the situation, and says, “you know, for this next meeting we should invite the primary care department.”

The Primary Care department arrives

“So, you folks at Sherpaa only want me to see the super complicated chronically ill patients? Do you know how much money I make on the simple/moderate issues? I get paid essentially the same for simple vs. chronic cases and you want to take all those cases away from me?”

“You want to turn me into a specialist?”

“My patients love visiting me.”

“There’s no way you can do so much without seeing a patient. This seems shady.”

“Urgent care centers are already stealing a ton of my business.”

The conversation pretty much ends

A few weeks ago, I conducted a highly unofficial twitter poll:

If most industry insiders think there are less than 20 innovative hospital networks in America, out of those 20, how many also have primary care departments willing to innovate and disrupt themselves?

I’m going to wager none.

That’s why urgent care centers arose independently of hospitals. They offered something of real value, accessible care that’s less expensive than an ER. But they did it without sanctioning from the local primary care department. They also sold a widget that insurance companies would pay for because it was an office visit (something an insurance company could wrap their head around) that was less expensive than an ER. For the patient, it was by no means a service innovation. It was still just a doctor in a room. But it was definitely a better deal.

So that’s where we are as a country. Urgent care centers are the most innovative thing we can tolerate.

So…how are we going to disrupt both the urgent care center (they shouldn’t really need to exist if primary care was accessible) and the primary care department? Is this impossible?

Again, fixing healthcare isn’t a tech problem, it’s a political one. And it’s political all the way from the federal government to the local primary care department.


Have you noticed most of you probably haven’t gotten raises in the last 10 years? Well, your boss has told you you’ve gotten a raise, but neglected to mention that you’d be footing an increasing share of your health insurance premiums plus all of the deductible.

In the end, your net earnings have probably decreased. Do the math. For those of you making over $100k in a high growth industry, you might not have noticed, but for those making a solid middle class salary that rises proportionately to inflation, it hurts.

When your employer and the healthcare industry is asking more and more of you, you’re probably wondering what you’re getting in return. It’s surely not better customer service or a wider breadth of things they cover from your health insurance company. And it’s not nicer waiting rooms, friendlier receptionists, same day appointments, easier refills, and longer appointments with your doctor. You’re paying far more and getting far less. I guess one caveat to this is Obamacare mandated coverage for a smattering of different things of questionable value. But then the daily news coverage of the political bickering about Obamacare and Repeal has turned your trust in the government to a bit of a life and death joke.

I’m a bit obsessed with my company, Sherpaa. I want it to be a success. It deserves to be. People need a pleasant, convenient experience with accessible doctors at an affordable price. But what does affordable mean to people? Since I’m obsessed, I ask as many people as I can about Sherpaa. The first question I get 90% of the time is “will my insurance cover this?”

When people’s spend is already maxed out, they’ll go through hell.

Insurance companies only cover the status quo. If having health insurance to most people means your care will be covered, and they discover that this thing they want (name any healthcare innovation looking to make a patient’s life easier) is not covered, does that mean, in their mind, it’s not good care? It’s the terrible Catch-22. Insurance companies stifle innovation. But that’s already been covered. The real reason why people ask this is they’re already maxed out, getting less and less value, and they’re looking for hacks to the system (how can I still get what I need but for free?). When the government mandates your $700 monthly premiums, and you need primary care ~2 times a year, and you can’t envision how or why you’d ever spend your $4,000 deductible (it’s human nature to think you’ll never get sick or hurt), you can’t come up with a good reason to spend any more money on anything remotely related to medical care and doctors. I’m already spending a ton, that should be purchasing me something, right?

People are super confused about premiums, deductibles, co-pays, co-insurance, medical bills, Explanation of Benefits, in-network, out-of-network, formularies, pre-authorizations, lists of doctors, balanced billing, etc, etc, etc..

That’s why very, very smart people who are doing complicated, important things in the world essentially throw up their hands, ignore the nonsense as best they can, and choose to deal with this BS in the heat of the urgency or after they’ve gotten care. It’s so complicated, they cannot formulate a proactive strategy to spend their money wisely or use care appropriately. And insurance companies don’t care as long as we continue paying our premiums. Plus, they’ve got a mandate that requires us to continue paying for this terribly complicated, financially harmful experience. Which brings me to the next point.

Insurance companies don’t care about you

You’re just a number to them, and hopefully you’re part of the large percentage of numbers that doesn’t cost them money. But no matter what they do, they’ve learned over the decades they can’t really do much to prevent you from being a cost to them. They might have to cover your maternity care due to Obama, but maternal mortality in America has risen over the years so is covering preventive care even worth it? And they know that most people won’t take advantage of their free preventive care so they just threw the government a bone.

You don’t care about insurance companies

Nobody ever, anywhere, said “I sure do love my health insurance company…I’m sticking with them forever.” You’re just looking to tick off the box saying you’ve got coverage. Most of you don’t actually know what level of coverage you need, because you can’t predict the future. You’re happy to switch every year or so to the plan that offers ticking off the box at the lowest cost. And “once I’ve spent my deductible, I don’t care how much my care costs the insurance companies.” It’s not like we’re all in this together. Once you’ve spent your share, it’s not your circus nor your monkeys.

Is healthcare screwed in America?

I’m going to say, sadly, yes. That won’t prevent me from trying, but holy hell there are just so many obstacles that stem from a system designed to extract as much revenue from every single player in America. Hospitals, doctors, insurance companies, Big Pharma, device makers, health tech companies, everything…in every investor presentation they say, “healthcare is a $2.5 trillion market, we just want to take a small slice.” When you get hundreds/thousands/tens of thousands of entities who have figured out how to take their small slice, you get American healthcare. And none of them are going to go down without a fight.

So what does this mean for today’s healthcare industry?

The other day, I was asked to envision healthcare in 10 years. I honestly threw up my hands and said I have no idea. I do know that when I’m old and in need, there’s no possible way anyone in America will be able to afford today’s flavor of American healthcare. That makes me think we either go down with a sinking ship and we’re all dead from death and destruction or, somehow, we create something new.

Alt-Healthcare. What would that look like?

It would have to be something altogether different, much like the creation of cryptocurrencies. It would have to function under different rules:

  • A lifetime commitment through yourself not your employer
  • Different incentives (professionals can’t get paid more for doing more)
  • A different health philosophy (less pills and scalpels, more food and exercise…essentially, lest Western and more Eastern which is nice because this trend is surely catching on as our culture increasingly questions status quo professionalism)
  • A different death philosophy (I don’t want to die in the hospital, I’d rather die at home and health professionals can’t view dying people as cash cows…something like 80% of your lifetime medical costs are spent in the last 6 months of your life)
  • This would need to be seeded by a small population of woke people

Although tech is a requirement for a thing like this to work, like everything nowadays, tech is just a given. It would be a mix of a new health philosophy, a new payment method/model, and a new way to optimize and improve health. More importantly, it’d be about the philosophy and the scalable building blocks that make this sustainably work for an increasingly mobile group of people over time. Creating something new is extremely fascinating to me. Call me crazy.

Looking for an example? Look at this 20 year old business that’s executing like mad.

The most disruptive concept in healthcare

When you have an ongoing relationship with a doctor, even if it’s an exclusively online one, and when that doctor can order lab or imaging tests to confirm suspicions, 70% of issues can be solved without an in-person visit. However, 30% of issues need, at one point*, an in-person visit.

Of those referred cases, 55% are referred to a specialist, 30% to an urgent care center, 5% to a retail health clinic, 5% to a primary care physician, and ~5% to an ER.

*At one point because a situation may be handled online for weeks only to need a specialist visit to create a strategy/treatment plan that can then be managed exclusively online over time. Truly, the only time you ever need repeated in-person visits is when you need to track a physical exam finding over time.

It really is that simple.

A few comments on the referral stats:

Issues fall into a few categories:

Specialist visit. For weird, complicated, but not urgent issues.

Urgent care center. Pretty straightforward but needs confirmation urgently via tools you’d find in an urgent care center.

Retail clinic. Very straightforward, needs confirmation with a simple in-person test, and urgency would be nice but not necessary/worth the extra $250.

Primary care physician. Straightforward, but would benefit from routine physical exams.

Emergency room. Complicated, weird, potentially life threatening and needs emergency action.

Acquiring new patients: Insights from the last 10 years of building physical and online practices

In 2007, I started my first practice, simply called soon after finishing my last residency at Johns Hopkins. It was a website telling the world who I am and what I offered. I didn’t have a physical store front practice. It was entirely virtual and I saw patients via house calls. Here’s how it worked:

  • People would navigate to my site, read up on me
  • They’d click on make an appointment which would bring up my google calendar
  • They’d choose a time, tell me their symptoms and their address
  • I’d get an alert on my iPhone that I had a new patient (the first iPhone was just released two months prior)
  • I’d do a housecall (only people from certain zipcodes in Williamsburg or Greenpoint could schedule a housecall)
  • We’d follow-up on email and they’d pay me $100 via PayPal

In the first month, I got 7 million unique hits on my website due to press in Gawker, Seth Godin’s blog, local and national Fox News, CNN, NY Post, etc.

The vast majority of those visitors were from outside my housecall area. While the press was great for a fluffy news story that a young housecall doctor in Brooklyn was using the internet to power his practice, it wasn’t like my practice was immediately full. Many folks in the neighborhood knew me (“hey that’s that internet doctor”) and I’d get the random “Hey doc!” as I walked down the sidewalk on Bedford Ave in Williamsburg, but that didn’t mean they paid me for my services. They became aware of me, remained aware of me, but their awareness didn’t match up with their need. People in the working age demographic use a doctor’s services ~2.7 times a year. The funnel looked like this:

  • 7 million visitors to my site from all over the world
  • Population of Williamsburg and Greenpoint: 172,000
  • Population of Williamsburg and Greenpoint that saw press about me: Guesstimate is 3%
  • Population in the neighborhood that became aware of me and then would potentially use this new online housecall doctor: Guesstimate is 10% (~5,000)
  • Population that was aware of me, into my service, and needed a doctor in the month (based on the 2.7 times per year) after seeing the media blitz: ~62

So from 7 million to 62 in-need potential patients per month. That seems about right to me. The practice was severely limited in catchment area and capability.

Hello Health

In 2008, I started Hello Health as an evolution of my house call practice. Instead of doing house calls, we built two internet-enabled brick and mortar practices in Williamsburg and the West Village (it’s nice to be flush with VC cash isn’t it?).

Those practices were powered by the EMR we built from scratch:

We weren’t fortunate enough to get the free 7 million uniques media blitz of my first practice but were able to get enough tech, design, and healthcare national press that many people in the tech and healthcare space had heard of us. But we needed patients in Williamsburg and the West Village, so all that national press had a negligible effect on our revenue. To that end, we advertised in the Bedford Ave subway stop and I do have to say it was pretty genius, thanks to the minds at The Barbarian Group:

Within minutes, the ad did its job, engaging the local community:

A week or so after installing this first ad we got a call from the MTA and CBS saying we had to take the ad down because “it encouraged graffiti.” Of course! That was the point! So we called the local news and pitched them on a story about how the MTA and CBS is censoring our ads. We got on the local nightly news and drove about 100,000 new visitors to the Hello Health site based on the press around this “controversy.” We eventually replaced the ad with this one:

Because we had a storefront, because we had subway ads, because we created a controversy, and because we got regular press, some local people knew about us.

We also peppered the neighborhood with smaller postcard-sized ads and offered flu shots as an incentive to learn more about Sherpaa:

The practice grew probably about double the rate of a traditional doctor practice. And this is despite the business model we chose at the time: $35 a month to simply join the Hello Health practice. Then we’d give you a receipt you could submit to your insurance company to get them to reimburse you.

So what does growth look like in this kind of practice?

First of all, investing in subway ads doesn’t mean you’ve gained the trust of potential patients and the investment surely doesn’t pay off in terms of how quickly the practice grows. Another example of this is Pager’s months long subway campaign from 2 or 3 years ago plastered all over the subway system to attempt to drive patients to their app-enabled house call practice. Flush with VC cash, that spend surely didn’t solidify Pager’s ongoing service as they’ve since pivoted away.

Traditionally, and with an online practice, the first day a doctor opens their door, they can expect zero patients. The second day, zero. The third, maybe one. By the end of the month, they’ve seen probably 30 patients. But, fast forward about 18–24 months and the practice is full (25 patients a day per doctor) due to word of mouth and people simply walking by the storefront and becoming aware of the practice. This is the reason why it’s so damn hard to start a practice from scratch. Revenue from the first two years is abysmally slow. It picks up, but those first few years are hard.

Increasing the velocity of a practice’s growth depends on:

  • Offering an exceptional service (convenient location, personality of the doc, doctor credentials, streamlined office operations, takes a lot of insurance, etc.)
  • People trying it and recommending an exceptional service to friends and family (but this means a lot of time from when the recommender needed a service to when they identify someone else needs a service, which is likely over 6 months)
  • Increasing the catchment area of potential patients (opening up more practices but each practice grows at the same velocity)
  • Increasing sickness in the local population (kidding! nobody would ever do that!)
  • Identifying the right neighborhood with the right demographic who would be most into a certain kind of practice (Williamsburg is a classic example of an early adopter neighborhood)

While Hello Health is charging forward 9 years later, the two practices in NYC were shuttered as the company transitioned from brick and mortar practices to becoming exclusively an EMR. That was around the same time I decided to move on.


In early 2012, we launched Sherpaa, an exclusively online medical practice.

At the time, I was convinced that the way to scale a healthcare service and meet VC-expected growth was exclusively through employers. Tumblr was our first client. Sign up one company and you get hundreds or thousands of patients! That’s not easy either. Focusing exclusively on employers was a huge mistake that I regret. I wish we always had a direct to individual channel open from day one so anyone anywhere could sign up when they read about us or when they switched jobs and had the option of continuing with Sherpaa as their PCPS. So, about 11 months ago, we opened up Sherpaa to individuals. Sherpaa means any individual has 24/7/365 access to the same small group of physicians (continuity and relationships are everything) at any time from most everywhere in America. Our service is exceptional and ~96% of people rate the Sherpaa experience as exceptional (a human-powered service is impossible to get to 100%!). We’re also effective and diagnose and treat ~70% of all primary care issues and coordinate care most appropriately for the other 30% that need an in-person visit.

Compared to a traditional practice, here’s what Sherpaa has:

  • 24/7/365 convenient, online doctor care
  • A massive catchment area: 48 states

Here’s what Sherpaa doesn’t have:

  • A brick and mortar storefront to promote daily awareness as you walk or drive by
  • A traditional “you know what you’re going to get” doctor office visit

So, we must depend on:

  • digital awareness (press, Facebook and Google ads)
  • trust (this is new and weird and has a different cost than I’m used to…should I use it?)
  • word of mouth

Over the course of the last 10 years of my career, I’ve been experimenting and observing. I’ve learned a ton about how to design and build a service that:

  • people use
  • makes them happy
  • delivers care effectively in an innovative new way
  • offers diagnosis and treatment to a nation rather than a neighborhood

This is the next phase of Sherpaa— marketing a new service in an online (and maybe offline?) way that gains the trust of potential patients and encourages them to recommend Sherpaa to their family, friends, and online followers. And because we’re a doctor’s practice that’s not tied to your neighborhood (people move all the time), nor your employer (people change jobs all the time), nor your insurance (change every 2 years..sorry Oscar), nor where you travel, Sherpaa is very sticky after people realize they’ve found they can have the same group of doctors for life. In our last 6 years of Sherpaa, we’ve never had a doctor leave Sherpaa. Based on the last 11 months of data, we have a very good estimate about the lifetime value of a customer and therefore know what the cost of acquiring new customers should be.

Side note, I went out to lunch with Seth Godin about two months ago and he told me the story about how Jeff Bezos calculated the estimated lifetime value of an Amazon customer in the very early days of Amazon as $33. He then gave anyone who could drive a customer Amazon’s way for $30 or less free reign to do so. Well, Bezos miscalculated because today’s lifetime value estimate is ~$900.

Sherpaa’s practice over the last 11 months has grown as expected and we’ve only spent a total of $1,000 (why?) on basic experiments on Facebook and Google.

Here’s what we need to build:

“I know about Sherpaa, I trust in the quality and effectiveness of their care, and I need a doctor now.” So…

  • Investing in advertising: matching awareness with near immediate intent/need to use doctors
  • Engendering trust in potential patients

Once we’ve figured out the most cost-effective way to increase the rate of growth of the practice, the size of the practice is limitless due to the catchment area of the entire United States. As patients join, we simply hire more doctors. No need to build expensive physical infrastructure to reach a new neighborhood. It’s just a slow and steady data-driven growth.