For the last couple thousand years, doctors have used the same tool to treat their patients— an appointment, a physical room, a conversation, and a payment for the time. Communication and problem-solving has happened exclusively in the exam room. The average person age 18–65 visits the doctor 2.7 times a year and the average visit is ~10 minutes for a total of 27 minutes of doctor communication and problem-solving per year. Because it’s an oral conversation, full of anxiety and jargon, patients forget ~85% of the conversation. That’s ~4 minutes of memorable education/conversation per year. This is Primary Care 1.0. Primary Care 2.0 is today’s “innovative” versions of value-based primary care 1.0 designed to fit a square peg into a round hole. It’s the same office-based primary care 1.0 trying to fit itself into an insurance payment model that transfers risks away from insurance companies and onto primary care doctor groups. Primary Care 2.0 also includes the Direct Primary Care model which can best be described as concierge medicine-lite. It deifies the old-fashioned doctor-patient relationship and offers consumers that one-on-one relationship for a fixed cost. It’s not trying to solve the “how do we scale primary care?” problem. It’s saying the old-fashioned doctor patient relationship is the best tool out there and we’re just gonna double down on it and sell that same couple thousand year old tool at a premium.

Tools solve problems. Primary care 1.0 and 2.0 are tools to solve a problem. Are these the best tools we can imagine to deliver care?

Primary Care 3.0 leapfrogs today’s old-fashioned primary care out of necessity and pressure placed on the industry to meet today’s consumers’ expectations. It also exists simply because it can. Technology like machine learning and mobile-first services exist in other industries and there are a few in healthcare who can’t stand sitting by idly and ignoring what these tools can do for our nation’s health. We’re seeing this kernel in services like TelaDoc, Lemonaid, Sherpaa, Nurx, SteadyMD, and a few others. But what is Primary Care 3.0 and why should it exist?

Consumers don’t want Primary Care 1.0

In this 18–65 year demographic, 50% of people say they don’t have a primary care doctor. And, of that cohort, 50% say they don’t want a primary care doctor. Two conclusions can be drawn from this:

• Half of working age Americans do not value the tool given to them enough to establish a meaningful connection/relationship.
• Twenty five percent of working age Americans want a transaction, not a relationship. They just want their problem solved as quickly, as easily, and as affordably as possible.

Consumers Expect Easy Convenience

Consumers now expect tech-enabled services to be beautiful, easy to use, and centered around them. In an age where you can summon an uber in 3 minutes, people are logically expecting the same for healthcare. They’re also expecting services to be economical, especially as a new high deductible, out-of-pocket market is coming on board as deductibles have dramatically risen and will continue to rise.

Our Society is Mobile

Compounding this is a marked increase in mobility in our culture. Working age people are changing jobs, traveling regularly, moving neighborhoods, and changing insurance companies on an every few year basis. And primary care doctors are moving around as well as they become increasingly employed by local healthcare systems, urgent care centers, etc..

Primary Care 1.0 is Outdated

Today’s neighborhood-based primary care that depends exclusively on exam room communication and problem-solving has not been updated for thousands of years. It’s about time we start thinking of primary care, not as a one-on-one individual local relationship, but as a cloud-based service that quickly, accurately, and cost-effectively diagnoses, treats, and connects patients with the right care, at the right time, every time. Primary care must transition from unscalable one-on-one, local, in-person expensive transactions to scalable, mobile-first, inexpensive data-driven diagnosis and treatment services. Online asynchronous communication (email-like messaging) will be, by far, the main communication mode and in-person (office visits) or virtual/real-time (phone/video) will be reserved for more in-depth/urgent situations.

Primary Care 1.0 is Unstructured and Artsy

Today’s diagnoses come from physical visits, unstructured oral conversations, physical exams (a very blunt tool for most situations), and broad-testing (the more you test for, the more you can bill and the more diagnoses you can make). Future diagnoses will come from online, structured, analyzable conversations, and targeted testing to confirm data-driven suspicions. Due to machine learning/AI, it will cost nothing, except for the cost of a targeted test, to arrive at an accurate diagnosis 95% of the time. No humans will be involved in this stage of the process.

Primary Care 1.0 doesn’t manage conditions cost-effectively

Once a diagnosis is made, today’s ongoing management of a condition involves more increasingly expensive physical visits, more unstructured oral conversations, hopefully more targeted testing to follow progress, and no standardized, structured way to mark an issue as officially resolved. Tomorrow’s primary care management will involve few physical visits, structured oral conversations designed to elicit updates on progress, and targeted testing to objectively measure resolution. Over time, this entire process will be mostly automated via machine learning. Because outcomes are best when humans are augmented by machines, the machines will flag a situation and solicit a doctor’s help when necessary.

Primary Care 1.0 Thinks They Own Patients

Even more importantly, Primary Care 3.0 will function as a super-connector. We’ve all met people who are super-connectors. Their network is huge and they view their role in life as altruistic problem-solvers. Through engaging conversation, they identify someone who can help you. They do this for free, because they don’t feel like they own your problem and they don’t feel like they have the best solution to your problem. They always know someone who could truly help you. Today’s primary care claims too much ownership of their patients. They make patients come into the office to get a feel for the situation, and then refer relatively blindly to a specialist, without data to support the most appropriate referral. This is an expensive, time-consuming, error-prone, and inefficient process. By asking the right questions online, when assessing complicated situations, it’s nearly always immediately clear that a patient needs specialty care, not general care. And as our society gets more and more technical and specialized, consumers will demand cost-effective specialists. Primary Care 3.0 is agnostic and does not claim ownership. The whole goal of Primary Care 3.0 is to get problems solved as quickly as possible, with the fewest steps possible, from the most appropriate service. We won’t own people, we’ll own problems.

Primary Care 1.0 is Designed for Complex Problems

Primary Care 3.0 will meet the needs of the vast majority of the population because most people are simply not that sick and in need of high touch, expensive, ongoing routine care. Remember, 20% of people are responsible for 80% of total healthcare costs. And 5% of people spend ~50% of costs. Most people in this category are in their last stages of life or they temporarily need expensive care for a reversible condition (example: hip fracture due to a car crash). But 50% of people spend ~3% of costs. Low-touch, data-driven, online communication and management will diagnose and treat health problems for 80 to 90% of the US population.

Primary Care 3.0 isn’t humans, it’s humans augmented by machines

As you can see, Primary Care 3.0 is not a one-on-one relationship with a human in your neighborhood, it’s a relationship with a technology-enabled service designed to automate a diagnosis, recommend the least expensive treatment plan with the highest chance of success, and effectively flag a situation where real human doctors need to be involved. This scales primary care.

Primary Care 3.0 Will Exist Outside Insurance Payment Models

Insurance companies move too slowly to incorporate healthcare service innovations. Meanwhile, real people’s out of pocket healthcare costs are skyrocketing. If health insurance companies do not meet consumer expectations, they’ll quickly catch on that insurance will only be used for high cost, old-fashioned services only when you absolutely need that type of service. Lower cost catastrophic insurance + Primary Care 3.0 will be the most cost-effective way to solve health problems.

Primary Care 3.0 will be a Tech Platform

Primary Care 3.0 will be powered by a secure, network-driven, artificially intelligent communication and problem-solving platform. Here’s an example of what it should look like.

This is not a matter of if this is going to happen, it’s a matter of when.

Technology will disrupt the traditional old-fashioned exam room-based doctor and make the online practice of medicine markedly more efficient and higher quality. And the massive forces of economic pressure placed on individuals faced with skyrocketing healthcare costs will drive the growth of these new models of online healthcare delivery.

Politically, this is a challenge as primary care doctors want so badly to believe in the traditional primary care model and say good primary care is dependent upon a meaningful in-person doctor-patient relationship. But 50% of working age Americans don’t care enough about that to invest in a relationship and 25% of Americans don’t even want a relationship. We, as doctors, can’t deliver what we want. We have to deliver a service that people want. And we also have to admit that the tool we invented thousands of years ago is too expensive, too inconsistent, too unstructured, too much of an art, and lacks accountability. If a computer can drive a car in a chaotic physical world, a computer can easily leverage the right data to ask the right questions to accurately arrive at a diagnosis, treatment plan, and cadence for ongoing management of 90% of people’s problems.

I’m proposing a new definition of primary care, or, rather a new tool to solve problems updated for today’s changing economics and culture. The tool should accomplish the following. It should:

• Solve the problem of our culture’s mobility. Primary care 3.0 should be accessible anytime and anywhere.
• Solve today’s on-demand expectation. Primary care 3.0 should be available within minutes- not hours, days, or weeks.
• Determine a patient’s immediate needs at no cost to the patient. Prior to spending any money, a person must understand their needs. This will be done through a combination of human and machine learning.
• Be an agnostic, intelligent, super-connector at no cost to the patient.
• Be data-driven (“if a person answered a series of 25 questions in the following way, there’s a 98% chance they have this diagnosis” and “if they have this diagnosis, “there’s a 99% chance they’ll respond to the following treatment strategy.”)
• Be cost-conscious. Care is getting wildly expensive. Primary Care 3.0 should use data to recommend the least expensive way to diagnose and treat, and manage over time 95% of general health issues.
• Know its limitations. When Primary Care 3.0 needs a human to make a decision, it will solicit help from a professional.
• Work for 90% of the population.
• Be an open-source, secure tech platform

To “use” your insurance to most people means “will my insurance cover this in-full?” Here are the conditions that must be met for your health insurance to cover things in full:

• You must have spent your entire deductible
• You have a plan without co-pays (very, very rare)
• You have a plan without co-insurance (increasingly rare)
• The expense happened during a routine annual physical and was a recommended screening test for your age/gender/risk factors (thanks Obama!)
• Certain forms of contraceptives (thanks Obama!)

The real questions are:

• What will it cost me to see a doctor or visit an urgent care center or ER?
• What will it cost me to get tests?
• What will it cost me to get procedures?

The answer to these 3 questions is, before you’ve spent your entire deductible, you are responsible for paying for the entire cost of these things.

So, now the question becomes “will my health insurance cover this in-full after I’ve spent my deductible?”

The increasingly likely answer is no. In decades past, when we as adults were introduced to the concept of health insurance, insurance used to cover all visits. Then they started introducing co-pays (to visit the doctor, you have to pay $25 at the time of the visit). Then they introduced co-insurance (your health insurance pays, say 80%, of the bill and then you pay the rest after you’ve met your deductible). The real reason people are confused about this is because deductibles, co-pays, and co-insurance are relatively new concepts that were introduced gradually over time. As you can see, these are measures to offload costs from health insurance companies and employers onto you. The days of insurance fronting the costs of all things are over.

To clear things up, until you’ve spent your entire deductible, co-pays and co-insurance do not yet apply. After you’ve spent your entire deductible, you start sharing the cost through co-pays and co-insurance.

So, before you’ve spent your deductible, the smartest thing to do is to be a super savvy healthcare consumer. If you have to spend $4,000 out of your own pocket before insurance even kicks in, it’s important to spend that money wisely in partnership with a doctor who’s looking out for your spend. And that’s what we do at Sherpaa.

What is Sherpaa and what is One Medical?

One Medical is a traditional brick and mortar primary care practice located primarily in San Francisco and NYC that offers online scheduling and same or next day appointments. There’s a significant membership fee for individuals ($149 per year) or companies (~$40,000 for 250 employees) to join and each visit then costs employees market prices for a traditional primary care visit. Their main sources of revenue are a membership fee to individuals or companies plus traditional reimbursements from insurance companies. The more visits they do, the more revenue they generate from your employees.

Sherpaa is an online medical practice powered by our full-time physicians who diagnose and treat 70% of primary care issues virtually and, for the rest, personally arrange care with local specialists or facilities. It is traditional, relationship-based primary care, just online and available 24/7 from anywhere. Our mission is to prevent the unnecessary 70% of traditional office visits, like those that happen at One Medical, to make healthcare convenient and less expensive. There’s no membership fee to join Sherpaa and our only source of revenue is a per employee per month fee only for the employees that regularly use Sherpaa. That fee covers the cost of primary care for those employees and prevents unnecessary claims.

How much does One Medical charge employers per year?

For a company of 250, it costs the employer ~$40,000 in annual fees. For a company of 150 employees, it costs ~$24,000.

What does $40,000 a year get an employer with Sherpaa?

Roughly 275 primary care visits with Sherpaa’s doctors at no cost to employees. This is enough to cover 2 visits for the 60% of employees who use Sherpaa as their primary care doctors. These 275 online primary care visits prevent ~$68,000 in costs for primary care, urgent care, and ER visits.

What does One Medical’s $40,000 a year fees get an employer?

The ability for employees to walk through One Medical’s door. It does not cover the cost of doctor visits and their add-ons. Employees must pay their own medical bills.

Should One Medical pay companies for lead generation? Yes.

One Medical has deals with brokerages and HR platforms like Sequoia and Justworks that give One Medical away for free to employees of companies that use those services. One Medical pays those companies for patient lead generation. An employer is no different. One Medical should be paying employers for their employees’ healthcare dollars. A company has employees who spend money on healthcare. One Medical wants their money. It’s old-fashioned lead generation.

How much will your employees spend on traditional healthcare per year?

50% of employees spend $0 to $100

40% of employees spend $100 to $5000 or less

10% of employees spend more than $5,000 a year

Half of employees will not need a doctor in a given year. And half of your employees will use a reasonable amount of healthcare. But do they already have a primary care doctor? And are they willing to switch their care to One Medical’s doctors?

Say you have a company of 250 employees. In reality, 10-20% of them will use One Medical.

What does a $40,000 One Medical membership fee cover?

These are from the actual line items in a One Medical $40,000 proposal for a 250 person company.

#1: One Medical Membership for each eligible employee

One Medical charges employers an $11-$13 PEPM fee for all eligible employees, whether or not they use it. Companies can choose to include dependents age 14 and over. If 20% of employees use One Medical (this number is probably quite realistic), this costs you $800 per employee per year and the employee pays for each visit out of their own pocket. Compare this to the often waived $149 fee each employee would have paid if they signed up as an individual.

If x% of employees use One Medical, this is the membership cost to employers per user:

10% = $1600

20% = $800

30% = $533

40% = $400

50% = $320

60% = $266

70% = $228

80% = $200

90% = $178

100% = $160

#2: Access to high-touch primary care

Annual membership fees simply pay for access or an affiliation, not care. But in-person office care is where One Medical does a good job. It’s a well-designed traditional doctor office that offers online scheduling and same or next day appointments. That’s surely an upgrade to traditional primary care. ZocDoc also offers same and next day appointments with primary care doctors at no cost to you or your employees. One Medical also bills like a traditional doctor’s office. The more diagnoses they make, the more tests they do, the more your employees pay them. When doctors charge you more for doing more, your doctor’s economic interests are competing against yours.

#3: 24/7/365 Telehealth

This service is powered via phone or video by non-doctors for limited, simple conditions for 24/7 real-time nurseline-like care. One Medical does not charge your employees for each use of this service.

#4: Access to all offices nationally

One Medical is operating in 6 cities: 26 offices in the San Francisco area, 9 offices in NYC, 2 offices in Boston, 3 offices in LA, 3 offices in Chicago, 4 in Phoenix, and 6 in DC. If employees who use One Medical regularly travel to these cities and need medical care during normal operating hours, this could be valuable if they are within a convenient distance from one of their practices in another city. But for those remote employees who don’t live or work near a One Medical practice, One Medical is irrelevant to them.

#5: Access to Women’s Health Services

These are services provided by a family practitioner or physician assistant. They are not gynecologists nor obstetricians so they will not offer services for pregnancies. Most working-age women already have a gynecologist.

#6: Travel Health Consultation

This service costs an employee $50 plus the few hundred dollars for the cost of a limited range of vaccines. Anyone can enter their itinerary here and the CDC will offer recommended vaccines to be administered in any doctor’s office.

#7: Patient Financial Navigation

There are no details to be found on any of One Medical’s materials that describe this service.

#8: Open Enrollment Communication and Support

This is an opportunity for One Medical to explain their services and attempt to drive engagement and employee revenue toward One Medical. This isn’t really a benefit to be included in an employer’s annual fees.

#9: Rise Nutritional Coaching

Rise is an app One Medical acquired that anyone can download. Your employees will need to pay a $15 to $90 a month, non-insurance reimburseable in-app purchase to use in-app nutritionist services.

And for an extra cost:

• Annual on-site flu vaccination program ($18 per employee per year. Others can also visit your office to administer flu vaccines)
• Annual on-site biometric screening ($60 per employee per year)
• 11 On site care days per year: ($25,000 per year)
• Virtual-only telehealth care (an additional cost to the employer and available by request…see above for a description of their telehealth service)
• Building an on-site center: Custom pricing

What is not included in your One Medical fees?

• Free 24/7 physician care for your employees that prevents 70% of in-office primary care, urgent care, and ER visits from happening.
• Real-time insights from a dashboard an employer can log into that shows how many employees were using One Medical services with anonymous details about actual usage. You should know at all times the value you’re getting from your investment.

How does Sherpaa add value to employers and employees?

All fees paid to Sherpaa covers the cost of our full-time, dedicated doctors’ care and expertise so it costs employees nothing to get primary care. Sixty to 70% of employees use Sherpaa each year and we prevent 70% of in-person primary care, urgent care, and ER visits your employees would have previously had to pay for out of their own pocket. And employers get a real-time dashboard to see how many of their employees are currently using Sherpaa, how many cases were created, and what types of cases.

You pay for each and every One Medical visit out of your own pocket and there’s no way to know how much you’ll be billed. It’s traditional healthcare.

Sherpaa is a flat rate for unlimited care. We keep things simple and transparent. When other doctors charge you more for doing more, their economic interests are competing against yours. One Medical, and other traditional doctors, bill you more for doing more.

Sherpaa believes accessibility is a doctor’s ethical duty. You, nor your employer, should pay a meaningless access fee to doctors and then pay for each visit. The money you pay doctors should be for their time and expertise. See how much employers pay for One Medical here.

Sherpaa turns multiple visits into one. When you need more than primary care expertise, Sherpaa doesn’t make you come in to then refer you to what you actually need. We get your story via our app, understand your needs without an appointment, and then personally arrange specialist or urgent care for you. That way, Sherpaa skips the traditional primary care visit and sends you directly to the specialist with the expertise needed to solve your problem.

When you’re sick or hurt you shouldn’t have to go visit a doctor unless absolutely necessary. Sherpaa diagnoses and treats the majority of primary care without in-person visits. One Medical overwhelmingly requires in-person office visits, with occasional virtual care handled by doctor assistants. One Medical restricts their telehealth service to a few “common” things to drive more office visits, and, therefore, more revenue from you.

Sherpaa can be your primary care doctors for life. You don’t have to live or work near our physical office. When you move neighborhoods, change jobs, switch insurance, or travel, you should have the same doctors.

Sherpaa uses full-time, dedicated doctors, not nurse practitioners or physician assistants. When your health is on the line, do you want extensive physician expertise or a “physician extender” employed to cut costs? 

Sherpaa will not send you medical bills that cause confusion and waste your time. One Medical traditionally bills you with the same line items full of medical codes and things that look like bills but say “this is not a bill.” In fact, One Medical online reviews suggest billing disputes are a primary complaint.

Sherpaa is an independent, mission-driven, self-funded company. One Medical’s last two rounds of funding came from a hedge fund and a private equity firm. Support Sherpaa. Or support Wall Street.