1 00:00:00,430 --> 00:00:03,580 Stacey Richter: Episode 489, The Margin Part. 2 00:00:04,000 --> 00:00:07,818 This episode is about margin that Creates a path to mission 3 00:00:07,818 --> 00:00:09,348 at a multi-specialty group". 4 00:00:09,408 --> 00:00:12,048 Today I speak with Dan Greenleaf. 5 00:00:20,563 --> 00:00:22,563 Tom Nash: American Healthcare Entrepreneurs and Executives 6 00:00:22,568 --> 00:00:23,928 You Want to Know, Talking. 7 00:00:26,658 --> 00:00:28,158 Relentlessly Seeking Value. 8 00:00:28,893 --> 00:00:32,313 Stacey Richter: Dr. Ben Schwartz wrote an article recently, and yeah, 9 00:00:32,313 --> 00:00:34,113 he makes a really compelling point. 10 00:00:34,143 --> 00:00:38,883 Dr. Schwartz wrote, "Ultimately, the most successful care models are those that 11 00:00:38,883 --> 00:00:44,583 create value Inherently. The goal isn't simply cost arbitrage, it's creating 12 00:00:44,583 --> 00:00:49,803 a sustainable system that makes value attainable. Care delivery innovation is 13 00:00:49,803 --> 00:00:54,956 about more than optimizing for VC returns or maximizing operational efficiency". 14 00:00:55,243 --> 00:00:59,713 That mention of value and how to achieve it for real, like actually 15 00:00:59,713 --> 00:01:03,193 create a care model that delivers value inherently is a great segue 16 00:01:03,193 --> 00:01:04,933 to introduce the show this week. 17 00:01:04,963 --> 00:01:08,023 It's a continuation of our mission margin theme, and this week we're 18 00:01:08,023 --> 00:01:13,063 talking about the margin part of the no margin, no mission cliche. 19 00:01:13,273 --> 00:01:17,233 So taking this from the top last week and go back and listen to that show if you 20 00:01:17,233 --> 00:01:21,643 have not yet, and you can listen to both of these parts in no particular order. 21 00:01:21,643 --> 00:01:22,393 You do you. 22 00:01:22,573 --> 00:01:24,723 But last week we talked mission. 23 00:01:24,923 --> 00:01:29,868 That part about value and creating value inherently the tie in here to mission 24 00:01:29,868 --> 00:01:34,428 and margin could be a value equation, really like mission divided by margin is 25 00:01:34,428 --> 00:01:36,408 how you calculate the value delivered. 26 00:01:36,898 --> 00:01:40,408 Less carrier spread, but that's a whole other show with Cynthia 27 00:01:40,408 --> 00:01:41,638 Fisher link in the show notes. 28 00:01:41,848 --> 00:01:45,988 So let me introduce my guest this week, who was also my guest last week, 29 00:01:46,018 --> 00:01:51,298 Dan Greenleaf, CEO of Duly, which is a multi-specialty group in Chicago. 30 00:01:51,478 --> 00:01:55,408 So last week Dan and I talked mission, as I said, but today we're talking 31 00:01:55,408 --> 00:02:00,373 margin, which is again gonna be the denominator of so many value equations. 32 00:02:00,493 --> 00:02:04,183 Last week in that mission show, quick review or spoiler alert, 33 00:02:04,243 --> 00:02:06,973 depending on the order in which you may be listening to these shows. 34 00:02:07,093 --> 00:02:11,123 But last week, Dan Greenleaf broke mission, Duly's 35 00:02:11,143 --> 00:02:13,693 mission into four quadrants. 36 00:02:13,873 --> 00:02:18,308 The four quadrants of mission being; affordability, access, 37 00:02:18,488 --> 00:02:21,248 consumer experience and quality. 38 00:02:21,338 --> 00:02:24,578 In this conversation today, the Margin conversation, Dan Greenleaf 39 00:02:24,578 --> 00:02:29,678 emphasizes that achieving these four quadrants reduces friction for patients 40 00:02:29,678 --> 00:02:33,968 and clinicians, that leads to not only better care outcomes, but also, 41 00:02:34,213 --> 00:02:36,493 financial sustainability, i.e. margin. 42 00:02:36,703 --> 00:02:39,853 Margin can therefore be a function of mission. 43 00:02:40,033 --> 00:02:44,323 And again, as Dr. Ben Schwartz put it, ultimately the most successful care models 44 00:02:44,323 --> 00:02:46,483 are those that create value inherently. 45 00:02:46,483 --> 00:02:47,413 So here we go. 46 00:02:47,623 --> 00:02:52,673 To be noted with one big fat fluorescent highlighter marker, a big part of 47 00:02:52,673 --> 00:02:58,013 this mission that comes up over and over again last week, it's about making 48 00:02:58,013 --> 00:03:01,613 prices reasonable and predictable and transparent for patients. 49 00:03:01,733 --> 00:03:03,833 Financial toxicity is a thing. 50 00:03:04,043 --> 00:03:08,383 Financial toxicity, not only is clinical toxicity when so many 51 00:03:08,383 --> 00:03:09,913 people are delaying needed care. 52 00:03:10,093 --> 00:03:13,603 And look, I don't often quote Marjorie Taylor Greene, but last week 53 00:03:13,603 --> 00:03:17,293 she was in the New York Times and was quoted as saying, "The cost of 54 00:03:17,293 --> 00:03:20,083 healthcare is killing people. This is what we should be focusing on". 55 00:03:20,203 --> 00:03:23,833 I just read the other day that one third of adults in this country are currently 56 00:03:23,833 --> 00:03:25,933 delaying or foregoing care due to cost. 57 00:03:25,933 --> 00:03:28,633 One third, not one third of low income or something like that. 58 00:03:28,753 --> 00:03:32,023 One third of adults in this country are delaying or foregoing 59 00:03:32,023 --> 00:03:33,523 care due to fear of cost. 60 00:03:33,668 --> 00:03:37,748 In today's world, affordability and price transparency is part of what 61 00:03:37,748 --> 00:03:41,438 customer experience means, not just like lemon water in the waiting room. 62 00:03:41,498 --> 00:03:45,908 This is what struck me the most about the conversation from last week. 63 00:03:46,088 --> 00:03:46,658 But wait. 64 00:03:46,718 --> 00:03:49,808 Does affordable for patients spell trouble when it comes to 65 00:03:49,808 --> 00:03:51,758 the margin part of the operation? 66 00:03:51,758 --> 00:03:55,328 Will an affordability mission wreck havoc on margin? 67 00:03:55,508 --> 00:03:57,758 Is this business model doomed? 68 00:03:58,123 --> 00:04:01,963 Is there even a successful care model that creates value 69 00:04:01,989 --> 00:04:03,729 inherently that is sustainable? 70 00:04:03,939 --> 00:04:08,738 Such a good question, which is why I ask it to Dan Greenleaf right out of the gate. 71 00:04:09,627 --> 00:04:11,337 Dr. Cristin Dickerson: This is Dr. Cristin Dickerson. 72 00:04:11,547 --> 00:04:16,167 Stacey, not only unearths and distills the problems with the existing healthcare 73 00:04:16,167 --> 00:04:20,547 system, she also offers hope for a better future for healthcare and 74 00:04:20,547 --> 00:04:22,407 for restoring trust in the system. 75 00:04:22,587 --> 00:04:27,147 If you rely on this podcast as much as I do, follow the Relentless 76 00:04:27,147 --> 00:04:32,090 Health Value page on LinkedIn and join the conversation. 77 00:04:32,090 --> 00:04:35,180 Stacey Richter: So just to sum this all up in the conversation that 78 00:04:35,180 --> 00:04:38,750 follows, Dan Greenleaf gets into the challenges and the strategies and 79 00:04:38,750 --> 00:04:42,500 involved in balancing mission-driven healthcare with financial realities. 80 00:04:42,500 --> 00:04:48,800 Duly's approach to being fiscally solid includes, well, I'm just gonna say many 81 00:04:49,010 --> 00:04:56,090 of the same types of efficiency things to maintain and retain margin that other more 82 00:04:56,120 --> 00:04:58,670 mainstream health systems might deploy. 83 00:04:58,910 --> 00:05:05,115 But I'd say there's a really striking difference in the why and the how. 84 00:05:05,265 --> 00:05:09,525 And the impact of this why and how is striking when you look 85 00:05:09,525 --> 00:05:13,065 at Duly's prices and the impact it has on its overall community. 86 00:05:13,185 --> 00:05:18,855 So even though it's using similar types of strategies, maybe as big consolidated 87 00:05:18,855 --> 00:05:22,725 health systems or other organizations, the impact and what it all adds up 88 00:05:22,725 --> 00:05:25,155 to is, again, very, very different. 89 00:05:25,335 --> 00:05:26,445 This is what I mean. 90 00:05:26,826 --> 00:05:31,383 At health systems, and maybe my head is just lost in a couple of anecdotal 91 00:05:31,383 --> 00:05:34,563 bits of evidence right now, but I just had two conversations in the 92 00:05:34,563 --> 00:05:39,363 past two days with physician leaders at big health systems, different 93 00:05:39,363 --> 00:05:43,233 ones, but both of these individuals said variations of the same theme. 94 00:05:43,413 --> 00:05:49,448 And if you wanna picture the scene, picture the saddest expressions, and 95 00:05:49,808 --> 00:05:53,708 one of them had a martini and the other one had a big boy glass of wine. 96 00:05:54,008 --> 00:05:58,238 And both of them said, Look, my organization has lost sight of patient 97 00:05:58,238 --> 00:06:02,108 care, but also my organization has lost sight of like financial goals 98 00:06:02,378 --> 00:06:03,878 in most parts of the organization. 99 00:06:04,058 --> 00:06:07,268 All I seem to do all day is play politics with a whole lot of middle 100 00:06:07,268 --> 00:06:11,703 managers or even senior leaders jockeying for position and having turf wars 101 00:06:11,763 --> 00:06:14,118 within these sprawling bureaucracies. 102 00:06:14,798 --> 00:06:19,598 These are just great people who are trying so hard to do the right thing and are 103 00:06:19,598 --> 00:06:24,518 just struggling to find the foothold to do so within their own organizations. 104 00:06:24,668 --> 00:06:29,168 So let's just say it was refreshing to hear Dan Greenleaf talk about an alignment 105 00:06:29,168 --> 00:06:33,548 of incentives and hook the margin up with the mission train in a really tight 106 00:06:33,548 --> 00:06:36,368 way throughout the entire organization. 107 00:06:36,633 --> 00:06:41,193 And to do this really well achieve that mission slash margin alignment across the 108 00:06:41,193 --> 00:06:45,611 whole entire organization, Dan underscores the value of clinician involvement in 109 00:06:45,611 --> 00:06:49,631 leadership and having, as I just said, aligned incentives with clinical teams. 110 00:06:49,811 --> 00:06:54,281 Keep in mind, this is the margin show where clinical leadership came up 111 00:06:54,311 --> 00:06:57,131 and the number of doctors on their board and the level of physician 112 00:06:57,131 --> 00:06:58,631 ownership in the organization. 113 00:06:58,811 --> 00:07:02,891 I'm highlighting that this is the margin show here because usually so-called 114 00:07:02,921 --> 00:07:06,831 dyad leadership with physicians in leadership roles, only comes up 115 00:07:06,831 --> 00:07:09,021 in mission conversations, right? 116 00:07:09,021 --> 00:07:13,461 Like in situations where somebody wants the doctor to be the defender of mission 117 00:07:13,461 --> 00:07:15,831 and the battle to keep the MBAs in check. 118 00:07:16,011 --> 00:07:19,461 And I say this as the comic book stereotype, obviously, but 119 00:07:19,641 --> 00:07:21,051 yeah, it's true often enough. 120 00:07:21,201 --> 00:07:26,081 But then we have Dan, who is thinking about clinicians who have, again, 121 00:07:26,081 --> 00:07:28,781 aligned incentives across the organization so you don't have your 122 00:07:28,781 --> 00:07:32,951 physician leaders day drinking while I'm sitting across from them finding 123 00:07:32,951 --> 00:07:37,331 myself quoting Sun Tzu the Art of War, and helping them craft the perfect 124 00:07:37,451 --> 00:07:39,690 PowerPoint slide to weaponize a reorg. 125 00:07:40,003 --> 00:07:44,063 Honestly, in my experience, there's no better way to waste metric ass-loads 126 00:07:44,083 --> 00:07:47,653 of money than in an organization where personal power grabs start to 127 00:07:47,653 --> 00:07:51,523 supersede anything that smells vaguely like an organizational imperative. 128 00:07:51,703 --> 00:07:56,503 And again, these just big bureaucracies at many health systems, yeah, too big not 129 00:07:56,503 --> 00:07:59,023 to fail at this is often the way of it. 130 00:07:59,263 --> 00:08:03,463 Then lastly, I grilled Dan Greenleaf about capital partners and how to 131 00:08:03,463 --> 00:08:07,993 manage to achieve private equity funding, where there's support for a 132 00:08:07,993 --> 00:08:10,843 model that delivers inherent value. 133 00:08:11,143 --> 00:08:15,313 A model that benefits both patients and providers as well as investors. 134 00:08:15,403 --> 00:08:18,533 And I'm saying this, keeping all of the things that Dr. Yashaswini 135 00:08:18,533 --> 00:08:22,123 Singh said in that episode about private equity a few weeks ago. 136 00:08:22,183 --> 00:08:23,383 Go back and listen to that. 137 00:08:23,593 --> 00:08:28,698 And by the way, Dan Greenleaf and this show has roughly the same ideas as 138 00:08:28,758 --> 00:08:34,068 Dr. Tom X Lee, founder of One Medical and Galileo told me, and also Dr. 139 00:08:34,068 --> 00:08:36,678 Rushika Fernandopulle, founder of Iora. 140 00:08:36,678 --> 00:08:37,728 Great minds think alike. 141 00:08:37,808 --> 00:08:42,248 So should figuring out how to work with PE be a topic of interest. 142 00:08:42,308 --> 00:08:43,058 There you go. 143 00:08:43,178 --> 00:08:46,448 Listen to my conversation today with Dan Greenleaf, and then go back and 144 00:08:46,448 --> 00:08:50,178 listen to those other two shows, links in the show notes as always 145 00:08:50,438 --> 00:08:52,208 or find them in the newsletter. 146 00:08:52,228 --> 00:08:54,958 If you subscribe and got it in your email this morning. 147 00:08:55,228 --> 00:08:58,078 That was a subliminal message to subscribe to our email 148 00:08:58,078 --> 00:08:59,488 newsletter if you missed that. 149 00:08:59,758 --> 00:09:03,208 Dan Greenleaf, CEO of Duly, my guest today, has been 150 00:09:03,208 --> 00:09:04,828 in healthcare for 30 years. 151 00:09:05,008 --> 00:09:06,598 He's a six time CEO. 152 00:09:06,748 --> 00:09:11,158 Three public companies and has also run three companies backed by private 153 00:09:11,158 --> 00:09:15,718 equity and thus very aware of the many different funding mechanisms 154 00:09:15,718 --> 00:09:17,398 that exist in the marketplace. 155 00:09:17,598 --> 00:09:18,618 My name is Stacey Richter. 156 00:09:18,618 --> 00:09:21,768 This podcast is sponsored by Aventria Health Group. 157 00:09:21,918 --> 00:09:24,738 But I do just wanna mention that Duly offered Relentless Health 158 00:09:24,738 --> 00:09:27,558 Value, some financial support, which we truly appreciate. 159 00:09:27,558 --> 00:09:31,428 So call this episode not only sponsored by Aventria, but also Duly. 160 00:09:31,668 --> 00:09:34,638 And with that, here is my conversation with Dan Greenleaf. 161 00:09:35,068 --> 00:09:36,898 Dan Greenleaf, welcome to Relentless Health Value. 162 00:09:37,078 --> 00:09:38,938 Dan Greenleaf: Thank you, Stacey, for having me. 163 00:09:39,028 --> 00:09:43,598 Super excited to be talking to you today and I think you do an unbelievable job. 164 00:09:43,828 --> 00:09:45,988 Your podcasts are just incredible. 165 00:09:45,988 --> 00:09:47,668 So thank you for everything you're doing. 166 00:09:47,788 --> 00:09:50,788 Stacey Richter: Well, I very much appreciate you saying that, those 167 00:09:50,788 --> 00:09:54,358 kind words, and I also very much appreciate the opportunity to 168 00:09:54,358 --> 00:09:56,068 speak with you today, my friend. 169 00:09:56,226 --> 00:09:59,436 So I wanna pivot now to margin. 170 00:09:59,496 --> 00:10:02,076 I wanna tee this up in a very specific way. 171 00:10:02,316 --> 00:10:06,576 By underlining a couple of things you said, which make me curious. 172 00:10:06,876 --> 00:10:09,756 The first thing you said, you were talking about some of your outbound 173 00:10:09,756 --> 00:10:15,426 patient activation and you said, we don't get paid for it, not that it matters. 174 00:10:15,696 --> 00:10:19,236 And now I'm thinking about that in direct contrast to that Charlie Munger 175 00:10:19,236 --> 00:10:23,556 quote that everyone loves to repeat, which is "Show me in an incentive 176 00:10:23,556 --> 00:10:24,756 and I'll show you an outcome". 177 00:10:24,756 --> 00:10:26,856 Those two things are in direct contrast. 178 00:10:27,161 --> 00:10:30,971 Additionally, you know, no margin, no mission, right? 179 00:10:30,971 --> 00:10:33,551 So we have to have some margin here. 180 00:10:33,851 --> 00:10:40,961 How are we reconciling these things in the current IRL payment reality 181 00:10:40,961 --> 00:10:43,361 where we've got fee for service? 182 00:10:43,391 --> 00:10:45,101 So obviously volume is incentive. 183 00:10:45,101 --> 00:10:50,021 We've got these value-based contracts, which sure, but they sometimes have just 184 00:10:50,021 --> 00:10:51,701 as many of the equal and opposite problem. 185 00:10:51,941 --> 00:10:57,111 So how are you achieving this very well-defined mission that you 186 00:10:57,111 --> 00:11:00,681 have given the margin realities. 187 00:11:00,791 --> 00:11:04,241 Dan Greenleaf: So just as a setup for this, like, just so everybody 188 00:11:04,241 --> 00:11:06,371 knows, we have 1800 clinicians. 189 00:11:06,881 --> 00:11:09,401 We have 190 locations. 190 00:11:09,401 --> 00:11:12,701 We're adding another 150 clinicians this year. 191 00:11:12,971 --> 00:11:15,461 We have a scaled fee for service business. 192 00:11:15,881 --> 00:11:18,881 We have a scaled ancillary business, and we have a scaled 193 00:11:18,881 --> 00:11:20,861 value-based care business as well. 194 00:11:21,101 --> 00:11:25,781 And I'd also say, you know, just because I feel like saying it, is that we're 195 00:11:25,781 --> 00:11:30,415 a hedge for the payers related to the hospital consolidation that's occurred. 196 00:11:30,673 --> 00:11:31,933 So how, how do we do it? 197 00:11:32,363 --> 00:11:36,473 I would say number one is that we do keep patients in our network. 198 00:11:36,473 --> 00:11:38,163 We do a really good job of that. 199 00:11:38,330 --> 00:11:45,860 We have 300 primary care physicians and about 65% of all referrals that 200 00:11:45,860 --> 00:11:49,460 we have, stay within the Duly network. 201 00:11:49,700 --> 00:11:54,590 So in other words, they go to one of our specialists if a specialist is needed. 202 00:11:55,105 --> 00:12:01,045 From a specialist to ambulatory surgery center, we capture about 76% of that. 203 00:12:01,465 --> 00:12:03,325 And there's a lot of value add to that. 204 00:12:03,545 --> 00:12:07,375 There's value add because we do have labs, as you know. 205 00:12:07,375 --> 00:12:11,155 We have 30 lab sites and six ambulatory surgery centers 206 00:12:11,155 --> 00:12:13,195 and 16 imaging centers, and. 207 00:12:13,750 --> 00:12:15,460 11 immediate care centers. 208 00:12:15,460 --> 00:12:20,640 So like you said, ER lite and then 40 physical therapy, locations, 209 00:12:20,640 --> 00:12:22,880 and a hundred infusion chairs. 210 00:12:23,110 --> 00:12:28,750 So keeping those patients in our network is really valuable to us. 211 00:12:29,350 --> 00:12:30,580 That's kind of number one. 212 00:12:31,140 --> 00:12:36,540 Number two is that, you know, we have to be tough negotiators with the payers. 213 00:12:36,540 --> 00:12:42,030 I mean, you, like I said, physician comp over the last 25 years, 214 00:12:42,030 --> 00:12:44,610 adjusted for inflation is down 36%. 215 00:12:45,120 --> 00:12:50,820 And so, you know, we use in some shape or form, is best we can, 216 00:12:51,090 --> 00:12:56,100 our scope, scale, and size to make sure that we're getting fair rates. 217 00:12:56,340 --> 00:13:01,595 The other thing we're doing is because we have a scaled business, we're able 218 00:13:01,595 --> 00:13:04,415 to keep our contact center costs lower. 219 00:13:04,715 --> 00:13:08,315 We're able to keep our revenue cycle management costs lower. 220 00:13:08,585 --> 00:13:12,095 We're also able to do a much better job on the purchasing side. 221 00:13:12,425 --> 00:13:13,835 So think procurement. 222 00:13:14,105 --> 00:13:18,128 And I think you also know that we've got 600 physicians that 223 00:13:18,128 --> 00:13:23,440 are shareholders, and 40% of our company is owned by our physicians. 224 00:13:23,710 --> 00:13:26,950 So there's a high degree of aligned incentives. 225 00:13:27,220 --> 00:13:29,140 When the company wins, we all win. 226 00:13:29,440 --> 00:13:33,940 And I think from a psychological standpoint, that really matters. 227 00:13:33,940 --> 00:13:39,865 And I also would say that we continue to invest in technologies, and I just look at 228 00:13:39,865 --> 00:13:44,725 a few of the ones that we've done that I do believe really benefit our clinicians. 229 00:13:44,955 --> 00:13:45,795 Ambient.ai. 230 00:13:46,165 --> 00:13:49,735 It's fascinating what we've seen there is that they're spending four and a 231 00:13:49,735 --> 00:13:56,195 half hours per physician, less on a weekly basis, is a result of Ambient.ai. 232 00:13:56,455 --> 00:14:01,735 We've also seen a five percentage point improvement in the patient experience. 233 00:14:02,025 --> 00:14:06,545 Because the patient's able to talk to the physician more directly. 234 00:14:06,805 --> 00:14:09,065 We've also invested in tap to access. 235 00:14:09,315 --> 00:14:13,835 When I got to the company, we were, our physicians were logging in 40 times a day. 236 00:14:14,135 --> 00:14:17,765 We just use a card now, and so that makes a difference. 237 00:14:18,065 --> 00:14:23,160 We use AI for scheduling, so we'd made it easier for the patient to schedule. 238 00:14:23,385 --> 00:14:25,185 That makes a difference for the patient. 239 00:14:25,455 --> 00:14:27,405 It makes a difference for the physician. 240 00:14:27,955 --> 00:14:33,075 We're also using these inbox, AI inbox, because I don't know if you 241 00:14:33,075 --> 00:14:37,185 know much about the way MyChart works, but patients could get in 242 00:14:37,185 --> 00:14:39,135 touch with the physicians constantly. 243 00:14:39,135 --> 00:14:42,705 And many of the questions they're asking are things that 244 00:14:42,705 --> 00:14:45,055 can be done by an auto-response. 245 00:14:45,075 --> 00:14:48,375 And we're using AI also to ascertain those. 246 00:14:48,375 --> 00:14:52,480 The point is, is like, we're always looking for ways that we 247 00:14:52,480 --> 00:14:54,449 can do things more effectively. 248 00:14:54,794 --> 00:14:58,849 We're looking for ways to lower the cost to serve that patient. 249 00:14:59,684 --> 00:15:00,914 That's part of it as well. 250 00:15:00,914 --> 00:15:06,494 And because we've got scope, scale, and size, we're able to do much of that. 251 00:15:06,794 --> 00:15:09,374 Stacey Richter: If I was gonna distill down what you just said 252 00:15:09,374 --> 00:15:11,424 there, and this is meaningful. 253 00:15:11,839 --> 00:15:18,229 Many of the, you know, in air quotes, "tactics" that I'm hearing are not 254 00:15:18,589 --> 00:15:24,889 that dissimilar from the way that a big consolidated system might think about it. 255 00:15:24,889 --> 00:15:30,469 For example, let's make sure that we're limiting network leakage or make sure 256 00:15:30,589 --> 00:15:34,669 that we're optimizing referrals and that we've got the scale and the scope. 257 00:15:34,669 --> 00:15:39,534 And that we have the efficiencies that can be derived from economies of scale. 258 00:15:39,774 --> 00:15:45,834 So in and of itself, if you just look at this from a tactical 259 00:15:45,834 --> 00:15:48,834 perspective, it's kind of a, Sure. 260 00:15:49,164 --> 00:15:51,554 This though, i'm gonna make exactly the same point that I 261 00:15:51,554 --> 00:15:53,054 made from a mission standpoint. 262 00:15:53,429 --> 00:15:58,349 That what is fundamentally different here is to what end. 263 00:15:58,709 --> 00:16:04,169 And if you roll everything that you just said and say, why are we doing this? 264 00:16:04,439 --> 00:16:08,759 And then you had mentioned Dr. Vivian Ho, and I'm gonna mention her as well. 265 00:16:08,759 --> 00:16:11,939 One of the things that she said relative to consolidated health systems, if 266 00:16:11,939 --> 00:16:18,209 you look at, how their C-suites are incented or what the objectives are or 267 00:16:18,209 --> 00:16:20,519 the kickers for them to get their bonus. 268 00:16:20,789 --> 00:16:24,449 A lot of times it's, add more beds to this hospital, for example. 269 00:16:24,449 --> 00:16:27,599 And you start thinking about the downstream implications of that, add more 270 00:16:27,599 --> 00:16:31,919 beds, like first of all, you wind up with stuff like Dr. Scott Conard talked about. 271 00:16:31,919 --> 00:16:34,829 You wind up with stuff like Dr. Stan Schwartz talked about. 272 00:16:35,229 --> 00:16:38,829 I'm not gonna repeat those stories, go back and listen, but these very perverse 273 00:16:38,829 --> 00:16:42,069 incentives where it's justifying, let's not prevent heart failure 274 00:16:42,069 --> 00:16:45,189 readmissions because we need to get these heads in beds because we need 275 00:16:45,189 --> 00:16:48,609 to have more beds because somebody's comp depends on having more beds. 276 00:16:48,706 --> 00:16:52,716 That drives consolidation, acquisition in a really big way. 277 00:16:52,926 --> 00:16:55,086 It also, you know, you think about more beds. 278 00:16:55,086 --> 00:16:55,776 What does that mean? 279 00:16:55,776 --> 00:16:56,796 More brick and mortar. 280 00:16:56,796 --> 00:16:57,516 What does that mean? 281 00:16:57,516 --> 00:16:58,266 More buildings. 282 00:16:58,266 --> 00:16:58,896 What does that mean? 283 00:16:58,896 --> 00:17:00,816 Less community tax revenue. 284 00:17:00,976 --> 00:17:02,476 Higher operational costs, right? 285 00:17:02,476 --> 00:17:08,206 Like there's a lot of downstream impacts to the C-suite of an organization having 286 00:17:08,206 --> 00:17:12,826 an incentives that may not necessarily be in line with the healthier community. 287 00:17:13,036 --> 00:17:17,206 What I'm hearing you say is, Sure we are doing similar things. 288 00:17:17,206 --> 00:17:22,016 But because we have 600 physician owners, what that implies to me 289 00:17:22,016 --> 00:17:25,826 is you've got kind of implicit or explicit dyad leadership, which we 290 00:17:25,826 --> 00:17:27,506 have talked about in multiple shows. 291 00:17:27,506 --> 00:17:29,126 Dr. Rushika Fernandopulle mentioned it. 292 00:17:29,126 --> 00:17:32,506 Dr. Tom Lee mentioned it, Vivek Garg talked about it at length. 293 00:17:32,506 --> 00:17:36,662 The importance of making sure that there are clinicians who are able, in 294 00:17:36,662 --> 00:17:42,136 a very fundamental, real way, weighing into the direction of the organization. 295 00:17:42,461 --> 00:17:46,391 Which is even amplified more by the fact that you have 296 00:17:46,391 --> 00:17:48,071 quantified what the mission is. 297 00:17:48,371 --> 00:17:52,391 And you talked about the healthier community also a as the piece of this. 298 00:17:52,601 --> 00:17:56,321 But the interesting thing also I believe relative to having the 600 299 00:17:56,441 --> 00:18:00,881 physician leaders in this kind of dyad leadership is that, to a large degree, 300 00:18:00,941 --> 00:18:05,291 the quality of the organization or how well the organization functions depends 301 00:18:05,291 --> 00:18:07,721 on what's up with the clinicians. 302 00:18:07,976 --> 00:18:11,426 So if you've got these individuals in leadership roles, then you not only can 303 00:18:11,426 --> 00:18:15,086 make their jobs nicer, just you talked about Ambient scribes, you talked about 304 00:18:15,086 --> 00:18:18,176 all the different things that just like, let's just make this efficient. 305 00:18:18,416 --> 00:18:23,186 But also from a moral injury perspective by having that mission front and center 306 00:18:23,186 --> 00:18:28,046 and quantified in the way that you do, I could easily see the ability to 307 00:18:28,046 --> 00:18:34,286 attract and retain the really good docs who wanna work for a place that is more 308 00:18:34,286 --> 00:18:37,346 aligned with the values that they have. 309 00:18:37,376 --> 00:18:41,936 So I'm definitely seeing, in this particular case, the mission margin, I see 310 00:18:41,936 --> 00:18:48,586 what you're saying, if you really double down on mission, you can amplify margin 311 00:18:48,586 --> 00:18:50,326 or these two things can work hand in hand. 312 00:18:50,476 --> 00:18:50,566 Dan Greenleaf: Yeah. 313 00:18:50,566 --> 00:18:54,831 I remember one of your conversations you had around hospital systems 314 00:18:54,831 --> 00:18:57,021 not having physicians on the board. 315 00:18:57,531 --> 00:19:00,381 Five of 11 of our board members are physicians. 316 00:19:01,041 --> 00:19:05,331 There isn't another healthcare company out there like that, I promise you. 317 00:19:05,631 --> 00:19:10,911 And that also says a lot, that we're putting our money where our mouth is. 318 00:19:10,911 --> 00:19:12,051 I would also say to you. 319 00:19:12,616 --> 00:19:17,206 . I wake up every morning thinking about how can I reduce friction 320 00:19:17,416 --> 00:19:22,154 for our patients and how can I reduce friction for our clinicians? 321 00:19:22,156 --> 00:19:25,756 And if we do those things really well, good things happen. 322 00:19:26,161 --> 00:19:30,691 I'm not naive to think we don't need to drive operational improvements and, 323 00:19:31,021 --> 00:19:36,241 and look for best practices and drive out waste, right, reduce variation. 324 00:19:36,421 --> 00:19:37,711 We all buy into that. 325 00:19:37,951 --> 00:19:41,191 But at the end of the day, this is about caring for patients 326 00:19:41,551 --> 00:19:43,651 and caring for our clinicians. 327 00:19:44,071 --> 00:19:47,715 I'll also say we have people who are dedicated in our company, two 328 00:19:47,800 --> 00:19:52,860 physicians, whose job is, to work with physicians who are struggling. 329 00:19:53,285 --> 00:19:55,085 We're struggling potentially emotionally. 330 00:19:55,355 --> 00:19:56,915 Who are struggling with the job. 331 00:19:56,915 --> 00:20:00,995 And so we've had a dedicated group of clinicians who are doing that. 332 00:20:01,535 --> 00:20:04,325 So I, I think, again, that stuff is in our DNA. 333 00:20:04,715 --> 00:20:06,305 Stacey Richter: How do you explain this to, you know, in 334 00:20:06,305 --> 00:20:07,540 our quotes, professional capital? 335 00:20:07,540 --> 00:20:15,330 Because generally speaking, shareholders, not all that interested in, let's just 336 00:20:15,330 --> 00:20:17,790 say the mission part of the equation. 337 00:20:17,790 --> 00:20:22,260 Not all, you know, there's some exceptions here, but, and you, you start 338 00:20:22,260 --> 00:20:27,840 talking to the hedge fund folks, and I have rarely heard the word patient 339 00:20:27,840 --> 00:20:29,670 come up in many of those boardrooms. 340 00:20:30,030 --> 00:20:35,190 But that's, you know, obviously you have capital partners here. 341 00:20:35,475 --> 00:20:36,525 How do you explain this to them? 342 00:20:36,685 --> 00:20:40,345 Dan Greenleaf: One of the fortunate aspects of my career is this is the 343 00:20:40,345 --> 00:20:44,215 third time I've done something with Ares, who's our capital partner. 344 00:20:44,725 --> 00:20:47,545 I was working with them as an operating partner. 345 00:20:47,545 --> 00:20:49,585 They asked me to come run this company. 346 00:20:49,885 --> 00:20:55,205 They know what I'm capable of doing and driving, you know, the right 347 00:20:55,205 --> 00:20:59,315 mission with the right rewards, with the right performance, and 348 00:20:59,675 --> 00:21:01,235 I just have a lot of credibility. 349 00:21:01,235 --> 00:21:03,845 I gotta be honest with you, I'm not, and I'm also not 350 00:21:03,845 --> 00:21:06,215 going to them asking for money. 351 00:21:06,215 --> 00:21:10,445 I'm, I mean, they are a capital partner and I need a capital partner. 352 00:21:10,445 --> 00:21:14,135 Think about, I'm competing against Northwestern who has $10 353 00:21:14,135 --> 00:21:15,455 billion on their balance sheet. 354 00:21:16,055 --> 00:21:20,975 Or Advocate who has $20 billion, or Endeavor, who has $6 billion. 355 00:21:21,390 --> 00:21:24,780 Or HCSC who has $24 billion. 356 00:21:24,780 --> 00:21:28,620 These are all tax exempt organizations, for the record, just so we're, 357 00:21:28,920 --> 00:21:30,750 we're clarifying what they are. 358 00:21:30,990 --> 00:21:33,960 And, uh, I wouldn't describe 'em as nonprofit. 359 00:21:34,200 --> 00:21:39,477 But I would also say that physician groups in general need capital partners. 360 00:21:39,494 --> 00:21:43,380 The key is performance, you know, it's like anything else is like 361 00:21:43,380 --> 00:21:47,320 you perform well, you get rewarded, it's pretty straightforward. 362 00:21:47,320 --> 00:21:51,445 And given the balance of perspectives on our board. 363 00:21:51,445 --> 00:21:53,035 We have five clinicians. 364 00:21:53,215 --> 00:21:56,515 We don't lose sight of physician experience. 365 00:21:56,515 --> 00:21:59,205 We don't lose sight of patient experience. 366 00:21:59,205 --> 00:22:03,715 And again, I don't believe under any circumstances are they mutually 367 00:22:03,715 --> 00:22:05,725 exclusive to our margin performance. 368 00:22:05,935 --> 00:22:10,315 Because I want to have, not only do I want to have a company that has the best 369 00:22:10,315 --> 00:22:14,335 patient experience, the best clinical experience, but I want the one with 370 00:22:14,335 --> 00:22:16,015 the best financial performance too. 371 00:22:16,570 --> 00:22:21,460 And I want to, frankly, I want to kick ass in all areas, and I don't think any 372 00:22:21,460 --> 00:22:23,710 of those things are mutually exclusive. 373 00:22:23,920 --> 00:22:28,360 I'll also say that when we drive fee-for-service business, 374 00:22:28,630 --> 00:22:31,540 we're saving the community 30%. 375 00:22:31,840 --> 00:22:35,990 So this idea that VBC is good and fee-for-service 376 00:22:36,010 --> 00:22:38,380 isn't, is to me, is nonsense. 377 00:22:38,650 --> 00:22:41,680 What the problem is, is institutional care. 378 00:22:42,045 --> 00:22:46,398 Where they're charging 9, 10, 12 times more than what we charge. 379 00:22:46,485 --> 00:22:52,035 So every time we keep, and this is my message to our physicians, every time we 380 00:22:52,035 --> 00:22:57,970 keep a patient in our network, it's more affordable, it's easier to access, it's a 381 00:22:57,970 --> 00:23:02,500 better consumer experience, and they get better outcomes from a quality standpoint. 382 00:23:02,770 --> 00:23:04,990 It is a win, win win. 383 00:23:05,110 --> 00:23:07,480 Stacey Richter: Let me ask you something and then we're gonna land 384 00:23:07,480 --> 00:23:09,280 this plane, what you just said. 385 00:23:09,280 --> 00:23:14,380 So you named Ares, you talked about the hospital systems, et cetera. 386 00:23:14,500 --> 00:23:17,405 Is that on the record, we're obviously recording this. 387 00:23:17,405 --> 00:23:20,285 Is there anything that you just said there that you wouldn't want aired? 388 00:23:20,428 --> 00:23:22,800 Dan Greenleaf: No, I, I mean, the only thing I would say is Ares they're a 389 00:23:22,805 --> 00:23:26,815 great capital partner, but I wouldn't be partnering with a third time unless 390 00:23:27,265 --> 00:23:29,305 that relationship was really special. 391 00:23:29,355 --> 00:23:32,164 Stacey Richter: So what I'm, what I'm hearing you say, just kind of in sum, 392 00:23:32,214 --> 00:23:34,494 you walked in the door with credibility. 393 00:23:34,524 --> 00:23:35,484 They trust you. 394 00:23:35,824 --> 00:23:37,834 At the same time, you trust them. 395 00:23:38,014 --> 00:23:44,804 And they trust, therefore, when you tell them achieving this mission is very 396 00:23:44,804 --> 00:23:51,061 important for them to, in a sustainable way, achieve the margin they're looking 397 00:23:51,061 --> 00:23:57,701 for, you have the credibility, and the operational, the track record to back 398 00:23:57,701 --> 00:24:01,961 that statement, and therefore you can work together very collaboratively. 399 00:24:02,291 --> 00:24:09,825 That is an important takeaway here as we contemplate the first thing 400 00:24:09,825 --> 00:24:15,765 that you said, which is, physician organizations need a capital partner. 401 00:24:16,065 --> 00:24:21,645 That doesn't have to be a rock in a hard place situation, as long as all 402 00:24:21,645 --> 00:24:26,745 of the things you said are true, which not everyone, just again pointing 403 00:24:26,745 --> 00:24:29,535 out, has the opportunity, right? 404 00:24:29,535 --> 00:24:31,455 Like it takes a while to get to that place. 405 00:24:31,705 --> 00:24:38,181 Dan Greenleaf, if someone is interested in learning more about 406 00:24:38,181 --> 00:24:44,301 Duly, if they are in the Chicago area, especially if they're a plan sponsor. 407 00:24:44,361 --> 00:24:48,441 If I'm picking up what you're putting down correctly, where would you 408 00:24:48,441 --> 00:24:50,301 direct them for more information? 409 00:24:50,451 --> 00:24:54,121 Dan Greenleaf: Yeah, I think you can go to our website, duly.com. 410 00:24:54,251 --> 00:24:56,031 You can go to my LinkedIn page. 411 00:24:56,381 --> 00:24:59,961 We publish a lot of things about the organization and what we're doing. 412 00:25:00,111 --> 00:25:02,931 And if people wanna reach out to me, it's dan. 413 00:25:02,931 --> 00:25:05,751 greenleaf@duly.com. 414 00:25:05,771 --> 00:25:08,591 I'd be happy to talk with people who are involved here. 415 00:25:08,591 --> 00:25:10,121 I've done something very similar. 416 00:25:10,121 --> 00:25:13,931 I've shared with you, I've reached out to a few people who I've heard 417 00:25:13,931 --> 00:25:18,251 on the podcast, so I certainly wanna extend that invitation as well. 418 00:25:18,401 --> 00:25:23,621 Stacey Richter: That is very kind of you and one of the reasons why I appreciate 419 00:25:23,861 --> 00:25:28,451 and love the Relentless Health Value tribe and the community of really smart, 420 00:25:28,451 --> 00:25:31,001 really giving individuals that are here. 421 00:25:31,001 --> 00:25:34,081 The willingness to share and learn from each other. 422 00:25:34,261 --> 00:25:37,261 Dan Greenleaf, thank you so much for being on Relentless Health Value today. 423 00:25:37,411 --> 00:25:37,981 Dan Greenleaf: Thank you. 424 00:25:38,549 --> 00:25:42,299 Dave Chase: Hi, this is Dave Chase, CEO, and co-founder of Health Rosetta. 425 00:25:42,539 --> 00:25:46,409 What I love about Relentless Health Value is that it brings to life William 426 00:25:46,409 --> 00:25:50,759 Gibson's quote, "The future's already here. It's just unevenly distributed". 427 00:25:51,076 --> 00:25:55,126 Rather than simply critiquing what's broken, stacey highlights the communities 428 00:25:55,126 --> 00:25:58,756 and leaders who are building new models that make the old system obsolete. 429 00:25:59,026 --> 00:26:02,656 It's like getting a time travelers report from healthcare transformation that's 430 00:26:02,656 --> 00:26:04,756 happening right now all over the country. 431 00:26:04,966 --> 00:26:08,236 If you care about transforming healthcare, I encourage you to 432 00:26:08,236 --> 00:26:10,036 subscribe to Stacey's newsletter. 433 00:26:10,306 --> 00:26:14,533 It's the easiest way to stay connected and keep up with new episodes.