Reinventing Primary Care - Rushika Fernandopulle, Co-Founder and CEO of Iora Health

SHIV GAGLANI:Hi, I'm Shiv Gaglani and today on Raise the Line, I'm really privileged to be joined by Rushika Fernandopulle, who's the co-founder and CEO of Iora Health. He also serves on the staff at Massachusetts General Hospital, on the faculty of Harvard Medical School, and on the boards of Families USA and the Schwartz Center for Compassionate Care. Iora Health incorporates team-based care that puts the patient first, as well as a payment system that is based on care, not billing codes and technology. Iora's primary care teams, which include a dedicated advocate for each patient, work together to treat the whole person. Before we get started, I'd also to thank our advisor, Peter Frishauf, for the introduction. So Rushika, thanks so much for taking the time to be with us today.

RUSHIKA FERNANDOPULLE: Thank you. It's great to be here.

SHIV GAGLANI: Can you start by telling us a bit about your background and what led to your interest in pursuing a career in medicine and then improving healthcare?

RUSHIKA FERNANDOPULLE: Sure. I'm a primary care doctor born in a place called Sri Lanka. We moved to this country when I was about two and a half years old. I have a dad who's a doc, but actually these days, even back then, that probably is a negative correlator that many dads who are doctors tell their kids, "You should think twice before doing it." I really felt like this was a great career where we can do the right thing and help people, and you could economically not be destitute. You could use science and use people's skills. It seemed like a really great thing to do.

What happened, though, is I got into medicine, and started seeing patients, and realized what a disaster our medical system is. We have great science. We have really great people. We have great intentions. But the way we organize it is a disaster. That's what led me on my career of continuing to practice medicine, but trying to fix the system at the same time.

SHIV GAGLANI: I'm quite familiar with the Iora Health model, just because I've been interested in healthcare economics for a while. Also just recently we had Vivian Lee on the Raise the Line podcast, and she writes very articulately in praise of the work that you and Iora have done. But for our audience, would you mind just giving them an overview of how you started the company, the scale, and then what exactly makes it different beyond what I said in the bio?

RUSHIKA FERNANDOPULLE: Sure. Again, it's not a secret that healthcare doesn't work very well. I think what virtually everyone else is doing, what I call the incremental change model, is take an existing practice and tweak it a little, change a little IT platform, a little quality improvement project, et cetera, and add some email, add a little technology. I think the core of Iora from 17 years ago was, "Maybe we ought to just start over. Maybe the system is rotten to the core." In general, I think what that is, is that we have built the system in this country as a series of transactions: document, code, bill, next.

You feel that as the doctor being a hamster on a wheel. You feel that as the patient being a widget on a line. I think we said, "What if we actually tore down the system and started over, and built it on relationships and not transactions?" Last I checked, that's what heals people. But once you start pulling on that thread, it unraveled a whole lot of things. You did a different payment model, a different space design, a different technology platform, a different process, et cetera. And so that's what we've built. It's taken us 16 years.

I started with a company called Renaissance Health. We started building a little one-off practice in Arlington. We gradually scaled it. We're now 47 practices in 10 different markets across the country. Really the core, again is, we call it high-impact, relationship-based care. It lets me build a system on that basis, by and large, in what's called full risk, value-based care models. 

We don't do fee for service. It's the wrong way to pay for primary care. We build new practices from the ground up.  We serve largely Medicare Advantage insurers and patients on Medicare Advantage because we can get these full risk models, but also do a little bit of work in self-insured employers and a little bit around the edges on retail. But in general, most of our growth is in Medicare Advantage with really a robust team-based care model, not just doctors, with people we call health coaches from the communities, speak the language of the people they serve, and help patients execute on the plan, integrated behavioral health. We huddle every morning. We email, and text, and do video chats. We proactively reach out, not just reactively. We have groups where people get together virtually and in person. It's not a little different than typical healthcare, it's completely different. We built our own EHR, the typical stuff out there, the Epics, and Cerners, and pick your flavor are built to document codes. They are cash registers. They're not really clinical programs. We've built our own, built a different culture. Again, it's bold, it's crazy, but it works, by the way. That's what we've been doing.

SHIV GAGLANI: Totally. It makes sense that there's so much innovation that you've had to bring into it because you want to imagine it from the ground up, as you mentioned. You mentioned EHRs. I'd like to double click on that a bit. Can you tell us about your own electronic medical records you guys created? What makes it different? And then, Peter wanted me specifically to ask you about it being FHIR compatible and making sure there's, I don't know if it's OpenNotes, but making sure it's visible by the patients as well.

RUSHIKA FERNANDOPULLE: Yes. We call it Chirp. An Iora is a bird from Sri Lanka. It's not an electronic health record, though it serves as that. It's really a care collaboration platform. What it really is, is a CRM, not an EHR. What we need to do is actually track all the data from our patients and all the relationships they have, and use that to generate knowledge. "This guy is not picking up his medications. He has diabetes out of control." We put those insights into the workflow so that we can collaborate with patients and their families, actually improve it, and then track and improve it.

It's a completely different thing. We actually don't care about billing or coding, which is nice. We can focus on actually  improving health. We don't build everything, by the way. If other people build great apps, we snap them in using, often FHIR-based interfaces, because that's the right way to do it. We use Box.com for document management. We use Looker for our data visualization. We use DrFirst to do e-prescribing. So again, what we're building is an operating system and snap in a lot of apps. We just got Promoting Interoperability Certification -- so that's been great.

From the very beginning, from actually 15 years ago, we have always let our patients see their whole record. It's their record, not ours. This myth of, "I, the doctor, will manage your care,” is silly. If you add up all the time your patient will sit in front of me, you get two hours. That leaves 8,764 hours they're not with me. But thinking I can manage their health is silly. So of course they need to know what's going on. So from the very beginning, we have let patients get—16 years ago, long before OpenNotes—see their notes, put information in. It's bilateral. They can put information into the record, too. That's how we manage things. We've been doing that for a long, long time. It's obvious; of course it's the right answer.

SHIV GAGLANI: Totally. Yes. I agree with you fully. We believe at Osmosis completely in the democratization of healthcare knowledge and information, because ultimately the patient should know. Behavior change begins with knowledge and contemplation. It isn't like the “sage on the stage” or needing priests to communicate to God model, we believe. You've been innovating in this for a while. Even when I was an undergrad at Harvard, I was hearing about Iora around that time. It was one of those first really innovative primary care models that was coming out there. In the last two, three, four years, we've seen a lot of innovation. On this podcast itself, we've had Marcus Osborne from Walmart Health. We've had VillageMD, ChenMed, Cityblock MD, Carbon. I imagine that you, as one of the early pioneers of this innovation are probably on one side, very happy with all the disruption occurring, but I'm also curious, how do you think Iora stays innovative and is the model that should expand from more than 10 markets to 100 markets, if that's what you want to do?

RUSHIKA FERNANDOPULLE: Yes. I started this company not to build a company, not to build a medical practice, not even to make money. I started for one, and one reason only, which is the transformation of an industry. Instead of studying it, and thinking about it, talking about it, let's just do it. Let the customers vote with their feet, let's kick that existing system in the behind. By the way, all the things I just mentioned about what we do -- huddles, emailing with patients, video chats, letting patients see their whole record, groups of people, proactive not reactive -- none of that's rocket science. We know the right thing to do. We all know the right thing to do, if you think about it a little bit.

The problem is, the existing system seems unwilling or unable to change for all sorts of reasons we can talk about. So we're going to make them change. If there are competitors or other people trying to do this, we fulfill our mission. It's great. We are happy as a clam. By the way, all of us in this space, we actually like each other. We know each other, we like each other. We talk to each other. We don't think of each other as the enemy.

The other dirty little secret, if you add up all of us, the Chens, and Oak, and the people you mentioned, Carbon, you get a few percentage points of the total market, if that. We are in the early innings, here. We're in the first couple of innings here. I think there's so much room for a bunch of us to grow. This is a three and a half trillion dollar market. There can be hundreds of winners here. We're not worried about that. Of course, we think we're going to keep innovating, we're going to keep doing things that push the envelope, and that's what we do. We're really happy to have --  we don't really call them competitors -- we call them fellow travelers. We have a whole lot of fellow travelers. And by the way, the public markets are now paying attention. Several of these folks have gone public either through regular S1s or through SPACs, which seems to be the flavor of the day. That's great, too. So it helps all of it. A rising tide is rising all boats at the moment.

SHIV GAGLANI: Absolutely, yes. It's a really exciting time, having followed the digital health space for a long time, to see a lot of this stuff come to roost in a very successful way. COVID has obviously accelerated a lot of things. Virtual care is something we've talked about a lot. One of your fellow Mass Gen physicians, Joe Kvedar, was on the podcast and he runs the American Telemedicine Association, as you know. So we had him very early on talking about how telemedicine was changing or being incorporated, finally. What are some of the lasting changes you think COVID is going to have? Can you also walk us through Iora's view on COVID? I would love to hear from when the pandemic started in Massachusetts, obviously it was a very hard-hit state early on. Just anything you can share about how, from start to now vaccines, it's impacted Iora's activities.

RUSHIKA FERNANDOPULLE: Yes, obviously COVID is huge. COVID hit, we were in Massachusetts. We also had practices in Seattle, which was the other epicenter when that just happened. At various times, Texas, where we have practices, was bad. Atlanta was bad.

When this first hit in March, we, like everyone else, we were in such good position. We don't get paid fee for service. Our revenue didn't change one iota. We've always been doing telemedicine because we can, and we could. We didn't have to invent stuff. We just turned the volume down low.

We decided to keep all of our practices open. All 47 of them were open, and very quickly pivoted to doing 92% of our encounters by telemedicine. But if we needed to see in person, and we had a very high threshold, we'll see you in person, back when we were all then trying to do this thing. Then we got better at it. We spun video up tremendously because video is just a much better way to do telemedicine than by phone, much better relationship, much better fidelity, et cetera.

I think what's unique about Iora...in the first two weeks of the pandemic, we reached out to every one of our patients, literally everyone, one-on-one by phone, typically, or text and told them, "We're here for you. We're open. By the way, your red state governor might be telling you you should go to the tattoo parlor at the beach. He doesn't mean you. You're old and sick. You need to stay home. Do you have enough food, do you have enough whatever? Do you need medicines? We can take care of you."

Our COVID infection rate was half of what it was in the rest of the country because only 11% of Americans in the first three months of the pandemic heard one word from the doctor. So all the news is coming from other sources. It's a travesty that that happened with their doctors. This is the biggest thing of the century. We should be communicating. That's what we do. What I'm really proudest of is that while most practices did all that, they very quickly, as soon as they could, went back to business as usual. Most practices are back to 90% in-person.

We decided, "No." One way to view a pandemic is to hunker down and do what you have to do, but then go back to the way it was. But the other one is this: we channeled Rahm Emanuel, who channeled Machiavelli, "Never let a good crisis go to waste." We ought to use this as an opportunity to actually pivot our model to the right thing, which I think is an omnichannel delivery model. So  today, we do about 19 encounters per patient per year, 19. Because that's what it takes to take good care of people. Now nine or 10 of them, let's call it, nine of them are actually asynchronous. They're emails or text messages. We keep doing that. But of the synchronous ones, the 10, 40%, so four are in-person visits, four are video encounters, and two are phone calls. So it's about 40-40-20. We think that's the right answer...that we have an omnichannel delivery model that we can serve our patients.

If it's the right thing to do this encounter in person, by all means come in person. But if you can do that by video, do it by video. By the way, it's done by the same group, not a separate group of docs doing telemedicine you've never met before, certainly not a separate company that doesn't even know your records. We think that's bad care in general, for older, sicker people. Same group of providers, same technology platform, same records, omnichannel delivery. That's the future of healthcare, and that's what we're doing and we'll keep doing.

SHIV GAGLANI: That's pretty remarkable. I had no idea. So 19 encounters, which is why, I guess, a traditional EHR is not set up for that kind of thing, but you built Chirp, which is...should we think about it like a Salesforce?

RUSHIKA FERNANDOPULLE: Exactly. It's a CRM where we can track all those encounters and track all the interactions that people have with us electronically, in-person, coming to a group, proactive, reactive. The other thing is collecting data from our patients from everywhere. What are their labs? Did they go to the hospital or to the ER? Did they fill their medication? All of those things about our patients and then use it to generate knowledge.

SHIV GAGLANI: Got it. That makes a lot of sense. Now that we have the vaccines, can you tell us a bit about that rollout? How many staff do you have, clinical staff at this point, at Iora?

RUSHIKA FERNANDOPULLE: Great question. We have probably about 550 clinical staff, about 100 of which are docs. The rest are health coaches, aides, nurses, et cetera. So roughly a little over 500 of them. The rollout's a disaster, as I think you know. We made this decision as a country that we're going to make it decentralized. I'm not sure that was the right decision. Israel made a different decision and it's doing a much better job than we are. So it's delegated to the states, the states each have different programs and different things. They delegated to the county health departments, which are underfunded.

It's a disaster when you're a company that's trying to do this in 47 practices, in 10 different states and different places trying to piece together, "How do we get vaccines for our teams and staff? How do we get vaccines for our patients?" It's an utter, unholy mess. We're doing the best we can. We've gotten virtually all of our teams immunized by now, but it was scrambling, phone calls, calling in favors. They all were high priority. We're taking care of COVID patients. But yet the hospitals soaked up all the vaccines, primary care practices are really left out in general. It is not the way to do this.

SHIV GAGLANI: Yes, that happened with PPE, where states were bidding against each other, as Andrew Cuomo was talking about. It's pretty remarkable. Hopefully we learn as a country what to do for the next pandemic, which, clearly, there will be more pandemics in the future.

What do you think are some of the other lasting changes? Obviously you've used this as a opportunity to change. A crisis is a terrible thing to waste, as you mentioned. What are some of the longer-term changes you think the healthcare system will have to make? Do you think now value-based medicine's here to stay? Is fee for service out because of the huge financial impact that it had on all of these hospitals over the past year, when they had to shut down all the elective surgeries and whatnot?

RUSHIKA FERNANDOPULLE: Certainly I think telemedicine is here to stay. Patients now have experienced it, just like Zoom. We're going to keep doing Zoom. Now, is it the only thing we're going to do? Absolutely not. But why not do it, to keep in touch with friends and family? Will part of education be by Zoom? Sure. Will part of medicine be by Zoom? So I think telemedicine now is here to stay. The genie's out of the bottle. Patients have gotten used to it, docs have gotten used to it, et cetera.

I think you're right, this whole idea of value-based care is, we, people like us, we've done great. People like Oak and the folks who you say are doing great, and typical practices are sucking wind. It's so hard trying to figure out how to do this in a fee-for-service system. The health systems, I think, are in trouble. Health systems, for years, have had this idea, "Oh, we've got one foot on the dock, one foot on the canoe, one foot in value-based care." I think, well, the fricking dock's on fire. It's time to get in the canoe. 

SHIV GAGLANI: I love that analogy. (laughs)

RUSHIKA FERNANDOPULLE:  It's slow. These things are really hard to change. I think what's happening is people like us, who are able to do value-based care, are showing them up. So eventually this is, it's going to be slower than people think, but I think what's clear now is the die has been cast.  It's going to take a while to play out, but we just outperform. We're getting calls all the time now from existing primary care docs and health systems who are now starting to realize the jig is up. “We cannot just go back the way it was. How do we try and figure this out?” That's going to be a hard challenge by the way. It's going to be a very hard challenge. But I think people are beginning to realize it.

SHIV GAGLANI: Yes, I couldn't agree more. A lot of our audience are currently in medical, nursing, PA school. We work with over 100 institutions. A lot of them are pre-health right now. What advice would you give to them about pursuing careers in healthcare? What would your sales pitch to them be about joining Iora? Especially because they're hearing about burnout. On one end, we have "the Fauci effect" where more people want to become healthcare workers because they're heroes, it's very fulfilling. But on the other side, they're hearing about burnout, and suicide, and all sorts of issues that COVID didn't cause, it just laid bare.

RUSHIKA FERNANDOPULLE: I continue to think that this is a great way to have a career. It's a great way to actually do the right thing, and serve a lot of great people, and actually create value and economically not have to be destitute, as I mentioned. I think it's a great career. I think there's so many opportunities. I get to practice medicine, and see patients, and build a company, and do policy work, and do things like this. I think you can have a really rich career. I think both things you said are true. It's a great career. I think typical healthcare, going and working in a typical fee-for-service system, the hamster on the wheel, you need to have your head examined.

I think that the real thing is there are there people like Iora and there are more and more people like us, as you mentioned. We are reinventing the system. I think this is a time of unbelievable opportunity where you can be part of the transformation of an industry. We haven't figured everything out. No one's figured this out and you're going to be a part of it. I think we have created opportunities to do this sort of work and not get burned out. Have IT systems that work for you, and automate the stuff that's a waste of time, and not have payment models that require to do things that don't work, and align all these things. The core problem of burnout, I think, in healthcare is what people call “moral injury.” We're asking people to do things that they know in their heart are wrong, and there are people like us who say, "Stop doing that." It's really simple. Stop doing that.

For instance, we say, "Fee for service is a wrong way to pay for primary care. It encourages transactional medicine and makes you do more stuff to people." So our thing is, stop doing it. We won't take it. It will not allow us to do the work we do. So we will only take payment models that allow us to do the sort of work we do. That allows us to create this.  If little folks like us can do it, what if the real big institutions actually got the guts to say that? Imagine if the Mass General or the Brigham went to all their payers and said, "Look, we think the way you're paying us out doesn't let us do the job that we took our oaths to do. So we're not going to take it anymore. When you're ready to pay us the right way, we will take your payment." That's what every other business in the world does. The person selling the good or service decides how they want to get paid. They have to take it or not, whereas in healthcare we have this, "Thank you, sir. May I have another?" And do whatever people say. 

Again, I think there are more and more people like us. I think Iora is a great place for people to come. We have a great team, have built a great culture. There's this chain. One of our first investors and board members was Tony Hsieh, the CEO of Zappos, rest his soul. Unfortunately, he met with an untimely end. But one thing he taught us is the way to build great companies, the way to change the world, is build great culture. Treat your teams really well. They will treat customers well. That'll engage them to create better outcomes. That'll create great economics, and you use that economics to invest in your teams and your patients.

I think we forget that in healthcare very often. People treat their teams and they treat their employees like crap, and then they wonder why they treat customers like crap, and they wonder why they have poor outcomes, and why they have poor economics. But I think there are more and more people like us who believe in that whole cycle. I think that's how we build great companies, and that's how we change the world.

SHIV GAGLANI: Absolutely. Sorry again about the passing of Tony Hsieh, he was very influential to us, too, at Osmosis. We read the book Delivering Happiness, and based a lot of our cultural values off of a lot of the lessons there. Another person who's name will go down as obviously great in business and culture, Herb Kelleher, who started Southwest, he would say, "Treat your employees best, and then they will treat our customers best. And then that will make the investors happy." Because too many companies are the reverse, investors first, customers next, and then employees are like chopped liver.

RUSHIKA FERNANDOPULLE: Yes.

SHIV GAGLANI: I know we're coming up on time. My last question for you is, is there anything else that you want our audience know about you, Iora, the healthcare system or anything else you'd like to share?

RUSHIKA FERNANDOPULLE: We are just in the early innings of this. I've been doing this for a long time. We started the predecessor company, Renaissance, in 2004, so 16 years. I feel like we've got a sea change going on now. The great quote, I think, by Schopenhauer is that, "First you're ignored, then you're opposed. And then people tell you it's obvious." We've gone through all of that. I think more and more people are now saying, "Of course primary care should be the most important part of healthcare and be the center of the healthcare system. Of course, value-based care is the right thing. Of course, you should use healthcare technology."

I remember when I started this, there was this argument, should you use computers in healthcare? And I was like, "You've got to be kidding me! Of course you should use computers in healthcare." But I think we've gotten people over a lot of those humps. COVID has accelerated a lot of these things, for better or for worse. So I think it's a really exciting time to go into healthcare and in particular, into some of these new model companies like Iora. I would encourage people to do so.

SHIV GAGLANI: Awesome. Great, great advice, and a great quote to end on. Rushika, I'd really like to thank you for not only taking the time to be with us today, but more importantly, for the work that you've been doing for decades, but specifically the last 15, 16 years, making value-based care such an integral, successful part of the healthcare system. I'm very excited to see what the next 16 years will bring.

RUSHIKA FERNANDOPULLE: Thank you very much. Cheers. Thank you for the mug, too.

SHIV GAGLANI: You're welcome. With that, I'm Shiv Gaglani. Thank you to our audience for checking out today's show and remember to do your part to flatten the curve and Raise the Line. We're all in this together. Take care.