EP445: Can a Primary-Care-Only Practice Survive in 2024? With Tom X. Lee, MD

Relentless Health Value™

In this healthcare podcast, I am talking with Tom X. Lee, MD, who has a long history in primary care. He founded One Medical and then also, most recently, Galileo. Dr. Lee also was a founder at Epocrates (tossing that in for context).

For a full transcript of this episode, click here.

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I wanted to talk with Dr. Lee because so many RHV (Relentless Health Value) listeners are trying to figure out how to sustain primary care as a stand-alone entity when the most obvious and most common way to make enough money in primary care is to drive and maximize the dollars from downstream volume of high-priced service lines, which, if you think about it, undermines the entire point of primary care.

I’m starting to call this the paradox of primary care because when you start seeing the promise of primary care have to erode if you’re gonna stay in the business of primary care, then yeah, it’s sort of a paradox. Said another way, if you do primary care really well and use evidence-based preventative care to curb the need for excess specialty care (ie, you reduce specialty revenue through primary care), now you’re asking specialty to not only make less money but use the remaining money to pay for primary care, which is the entity that is reducing its revenue.

So, again, I am hereby coining the term the paradox of primary care to express the conundrum for why a consolidated entity that knows where its bread is buttered is going to do much, if anything, to empower primary care with the technology and the staff and the time, which, if it goes well, is going to cannibalize its own major source of revenue.

Meanwhile, if you choose not to participate in this paradox within the context of a consolidated entity, it’s kinda hard to stand up a pure play primary care practice. And I’ve heard this so many times, most recently from Paul Buehrens, MD, who said, he wrote on LinkedIn, “My own primary care clinic lasted independent from 1946-2017, and when costs were rising faster than reimbursement with no alternatives available, we sought out purchase by our hospital, giving up on trying to stay independent. … Consolidation is not driven by bad actors nor by quality nor volume savings, but by the bizarre economics of healthcare as a highly regulated but hardly rational market.”

I simply don’t get why knowing as much as we know about the importance of primary care, CMS (Centers for Medicare & Medicaid Services) and others continue to follow RUC (Relative Value Scale Update Committee) guidance on PCP (primary care provider) rates.

How much power must be wielded by the AMA (American Medical Association) or the AHA (American Hospital Association) or who knows? I don’t know the half of it, admittedly. Listen to episode 437 with Brian Klepper, PhD, for more on just the RUC. Also, despite again all of the lip service about the importance of primary care, our current cohort of payers seems to have a thing going where they do not offer value-based care (VBC) contracts to the primary care folks who seem most likely to succeed. Add to that the moving goalposts for ACOs (accountable care organizations) and the lack of available data to even know how you’re doing, and yeah, here we are.

So, again, the question is how to sustain primary care without falling into a paradox. That is the hard question that I asked Dr. Tom X. Lee today. I asked Dr. Lee flat out what it takes to stand up a stand-alone entity doing primary care, and he said enlightened leadership with a value mindset combined with big-time chops in service operations.

I, of course, asked, what does enlightened leadership and mad skills in service ops mean exactly and specifically? Dr. Lee broke this down. Part of it, he said, is finding an eliminated hidden waste, which, according to Dr. Lee, does exist in primary care, although maybe in a thinner layer than elsewhere. And trust me, I asked Dr. Lee what is this waste exactly and specifically of which he speaks. Turns out, a lot of it is cutting out busywork (like clicking 90 times to order a Tylenol) or dumb paperwork or doctors doing stuff that a nurse navigator could do in between visits or the medical assistant could do or technology could just automate.

If you think about wasted time as capital W Waste, then yeah, there’s a hefty amount of waste that could be cut. This also comes up in episode 446 with Spencer Dorn, MD, MPH, MHA, which is next week.

Now, you know me … you start talking about getting rid of waste, and I am immediately going to ask you how you define value, how you define what you value, because when cutting waste, it’s really easy to cut more than waste. Listen to the show with Kate Wolin, ScD (EP432) or Rik Renard (EP427) or Will Shrank, MD (EP413) for more on that one. So, I get into a proper grilling with Dr. Lee on how he defines value, which leads us to talk about open access as one component of delivering value.

But then, of course, I bring up, yeah, well … access was Walmart and Walgreens’ hypothesis, giving patients access to care, and they will come, and that didn’t work out so well. The rebuttal there is access, sure, but access to what? And good point. Clearly, there was a disconnect between what patients thought good primary care should be and what was on offer.

And around the wheel we go, because again, we’re back to the delta between the promise of primary care and what often exists. Again with the paradox.

Okay … now, just let’s sum this all up here because I really want to get to the interview. The trick to doing a pure play PCP or indie PCP practice without falling into the paradox of primary care is enlightened leadership with a value mindset combined with service operations to find the balance between human centeredness, process, and technology. That’s kind of the big wrap-up of a many-pronged conversation that there is a balance here.

Dr. Lee puts it this way. He’s like, if you think about it as a paradox, you’re kind of creating a binary. What you want to find is the productive middle. Find the productive middle of primary care and you can get rid of the paradox.

Probably some of you are thinking direct primary care/DPC is a solution here and yet, for sure. But to do DPC well, you still have to have enlightened leadership and do a good job with service operations—especially if you’re thinking you want to work with employers or others who are going to measure outcomes.

Also mentioned in this episode are Paul Buehrens, MD; Brian Klepper, PhD; Spencer Dorn, MD, MPH, MHA; Kate Wolin, ScD; Rik Renard; William Shrank, MD; John Lee, MD; Scott Conard, MD; and Patrick Dunn, PhD, MBA.

You can learn more at Galileo.

Tom X. Lee, MD, is the CEO and visionary behind Galileo—a data-driven, multispecialty care model designed to improve quality and reduce total cost of care. Operating across 50 states and partnered with large employers and health plans, Galileo is one of the fastest-growing innovators in care delivery.

Prior to Galileo, Tom helped build One Medical into the leading, independent primary care system in the country. And previously, he helped launch Epocrates, the #1 mobile app used by clinicians at the point of care.

Tom is a board-certified internist who completed training at Harvard’s Brigham and Women’s Hospital. He received his bachelor’s degree from Yale University, an MD from the University of Washington School of Medicine, and an MBA from Stanford University’s Graduate School of Business.

07:02 What is the paradox of primary care?

09:19 Why is it hard to run an independent primary care practice?

10:01 What are the barriers to running an independent primary care practice?

10:41 Can you have fee for service and value?

12:25 “Value is more about a mindset.”

13:22 What hidden waste is there in a primary care practice?

15:11 What do you need to have a value-focused mindset?

17:14 Why does access precede quality?

18:20 Why have retail clinics failed in being longitudinal primary care destinations?

20:29 What is a longitudinal primary care destination and why does it matter?

23:48 What are the nuances of a service business that make them challenging for managers?

24:35 How do you find the balance between fee for service and value?

31:17 EP438 with John Lee, MD.

32:14 How can you invest in quality without a value-based contract?

34:19 How do you address the trade-off between fee-for-service finances and investing in value-based care?

35:36 Where is the “productive middle”?

36:27 Dr. Tom Lee’s message to payers.

39:55 Dr. Tom Lee’s message for policymakers.

You can learn more at Galileo.

Tom X. Lee of @galileomedical discusses #primarycare on our #healthcarepodcast. #healthcare #podcast #financialhealth #patientoutcomes #healthcareinnovation

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Paul Holmes (Encore! EP397), Ann Kempski, Marshall Allen (tribute), Andreas Mang, Abby Burns and Stacey Richter, David Muhlestein, Luke Slindee, Dr John Lee, Brian Klepper, Elizabeth Mitchell