Institute Talk: A Conversation With Iora Health CEO Rushika Fernandopulle

Iora Health Chief Executive Rushika Fernandopulle, left, and Gerontology Institute Director Len Fishman

Rushika Fernandopulle came to the United States from Sri Lanka as a young boy and later became a doctor after graduating from Harvard Medical School. He grew dissatisfied with standard systems of care, convinced alternatives that focused on primary care could work better. Fernandopulle eventually became the co-founder and chief executive of Iora Health, a Boston company building a national medical practice to do just that.

Today, Iora cares for nearly 30,000 patients at 35 practices, about 70 percent of whom are covered by Medicare. For many of its patients, IORA employs a “risk-based care” concept, accepting fixed annual payments to care for patients rather than billing for individual services. Gerontology Institute Director Len Fishman spoke with Fernandopulle recently about his ideas on improving medical care. The following is an edited version of their conversation.

Len Fishman: How did you initially become interested in pursuing a different approach to care?

Rushika Fernandopulle: I’m a primary care doctor who trained at Mass. General. I realized that the model we had for primary care was not optimal. It was fragmented and reactive. Patients weren’t getting better and they were unsatisfied with their doctors. I realized that the core of what we were doing was turning health care into a series of transactions. Document, code, bill. All the things we were trying to do to fix health care were just making the problem worse. The simple insight I had was that maybe what we need to do is start from scratch and rebuild the system from the ground up, starting with relationships and not transactions. And that required changing everything — the payment model, the process, the technology, the space.

LF: What were you doing at the time?

RF: I was working part-time running an inter-faculty health policy program at Harvard, and part-time practicing at Mass. General. I was fortunate enough to have funding from Harvard, which gave me a platform to go around the country and talk to people about this idea of rethinking primary care. But if you really want something to get done, you have to be willing to actually do it. I went to all the big health systems here in Boston – Mass. General, Brigham & Women’s, all these places – and they all said something along the lines of, “Well, that’s interesting but our practices are full, we’re making money, so what’s the problem?” And I said, “Our care sucks, patients hate it, doctors hate it, and it’s bankrupting the country.” But unfortunately, they still felt like this was not their problem. Remember, this was 15 years ago. No one gave a whit about primary care. They were too busy filling hospital beds. That was the moment I thought, wait a second, I’m a doctor. I can start a practice.

LF: What is the model of care like at your company?

RF: A lot of people focus on the broadly framed value-based care plan, where essentially as the doc you get paid not for doing more stuff to people but actually to improve people’s health. We started in a primary care capitation model, where we got paid a fixed fee for the primary care that we do. Eventually we moved to what’s called the global based model where we take responsibility for the whole health care dollar. That’s really important. In the old model, where you get paid a fee for service, someone else tells you what you don’t get paid for. We didn’t want that.

LF: How do you make a business case for that kind of care?

RF: In this country, only five percent of health care spending goes to primary care.  That means 95 percent of what we spend is on failure of primary care. If we did primary care right, we would save money in the end. We could keep people out of the hospital, out the ER, and out of procedures that they don’t need. So essentially what we’re doing is reallocating money spent on unnecessary downstream costs and pushed it into primary care. Similarly, we don’t spend enough money in this country on non-medical things. If we want to improve people’s health, we should address social determinants of health – poverty, making sure they have enough to eat, transportation. We should address lifestyles – eating right, exercising, stress control. And with the elderly, there’s more and more evidence to suggest that personal determinants of health have a significant impact on how we age. Things like sense of purpose, sense of optimism, and social connections. In this country, we don’t pay for any of that. We’re willing to pay for complications of care but invest nothing to prevent the need for that care in the first place.

LF: Where do you find physicians that embrace your model?

RF: We’re not trying to convert physicians. We are self-selecting people who want to do this and fit the culture. There are plenty of them out there. Younger docs are easier than older docs. Geriatricians are in line with this model since it’s very much suited for the geriatric population.

LF: Iora emphasizes the importance of the primary health care team – not just the doctor. Who’s on that team and why did you feel that a team as opposed to just a doctor was the appropriate approach?

RF: In a typical practice where you get paid a fee for service, the doctor is important because he’s the only one who can bill. And the doctor simply tells you, “You should eat less, exercise more, take your medicines, good luck” and he gets paid for that. You don’t give one whit whether the person actually does it or not. For us, where we’re getting paid based on our outcomes, we want not to just tell them, we want to make sure they do it. That’s the role of the health coaches. We have three health coaches per doctor. The only thing you really need to do that job is empathy — being able to connect with another human being. Everything else we can teach. One of the problems as doctors is we often have too much social distance from the people we’re serving. With health coaches, we have someone from the community, who speaks their language and lives their lives, but works for us.

LF: Who else is on the team?

RF: We’ve incorporated mental health into our practices. We have behaviorists in every practice, we have social workers, we have nurses, and we have a couple of operations assistants at each practice to help with paper work.

LF: Do patients feel that spending time with other members of the primary care team detracts from their time with the doctors?

RF: We’ve found that people tend to come for the doctor and stay for the team. These other people on the team are not there to substitute for the doctor. They’re there to add another layer of support. People start to realize that many members of the team are actually better than the doctors at different things.

LF: Who are the patients choosing Iora in the markets where you’re available?

RF: We have a broad spectrum. We try to go after the patients that need us. We don’t go after the high-income patients. We go after patients with low-to-middle incomes. We have a lot of seniors because we think this model works well for seniors who need all of these interventions. We still work with some self-insured employers who have older, sicker work forces.

LF: How do you know that what you’re doing is working for both the company and patient outcomes?

RF: We need to be executing in five things. First is patient experience. We ask if patients would refer us to a friend or a colleague. We look at enrollment and disenrollment rates. Second is clinical outcomes. We’re doctors. We ought to be improving people’s health. We ask patients directly “How do you think your health is?” Third is we need to make an impact on total cost of care. The whole model is structured to lower unnecessary care by improving health. Fourth is joy in practice. We should be doing all of the above in a sustainable way that’s better for people working in health care. Fifth, we ultimately have to do everything profitably because if we’re not profitable, we go out of business. We’re making progress in all five of these aspects.

LF: You mentioned profitability. Describe your company’s financial objectives.

RF: We made the decision early on that we needed to do this as a for-profit company. We are very much a mission-oriented company and our mission is to transform health care. Having watched a lot of non-profits try to do this, we thought that in order to be successful we have to get to scale and that requires some capital. In a non-profit company, it’s impossible to raise capital. So we had to find investors who understood that there wasn’t a conflict between the mission and making money. Our goal is not to maximize profit. Our goal is to maximize human impact. We also need a time horizon that is long enough. At the individual patient-level, it takes a few years to see a return. At each practice, it takes several years to see a return.

LF: So how much money has Iora been able to raise?

RF: We have attracted something like $240 million dollars over the past eight years.

LF: How has that process worked?

RF: We started out thinking that this might be a 10-year journey or maybe even longer. Iora is seven and half years old now. We are on track, but the key is to find the right investors. Our biggest investor is a group called Temasek, which is a fund from Singapore. They feel like one of the biggest problems the world faces, not just the U.S., is the aging population and there are no good health care models out there to address that. What’s great about them is that they have a 50-year time horizon. They see it as investing in our grandchildren’s future. One of the biggest problems in U.S. health care is that we’re so short-term focused. Health care doesn’t have a quarterly or annual time horizon.

LF: Where would you like to be ten years from now?

RF: For the last three years we’ve been doubling in size every year. We think we can maintain that path.

2 thoughts on “Institute Talk: A Conversation With Iora Health CEO Rushika Fernandopulle

  1. Great to hear about a better model that is working to improve the patients’ health, meeting the healthcare professionals’ desires to improve their patients’ health and operating in a financially sound way. Let’s hope more hear about it and embrace it.

  2. This is model is what every geriatric program should strive for. A mission to do well while doing good. The ability to add quality of life to health span is the ultimate purpose for our work with older adults. Finally an organization willing to take a longer-term approach in lieu of short-term budgets. Our society needs more of this sort of perspective.

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