Here’s the transcript of the interview earlier this week with David Seligman, CEO of Best Doctors. Pretty interesting especially for those of you thinking about how to improve health care quality on a national and perhaps nationally branded level. (By the way, the transcriptionists at Castingwords are getting really quick! They only got this 36 hours ago). For those of you who prefer listening to reading the audio is here.
Matthew Holt: This is Matthew Holt. I’m here with The Health Care Blog, and I’m talking with David Seligman. David is the CEO of Best Doctors, based in Boston, Massachusetts, and is also a locational contributor to the Boston Globe, as I noticed the other day‑‑and I’ve just found out, a regular reader of The Health Care Blog, which always is a pleasing thing.
David Seligman: [laughs]
Matthew: David, good morning. How are you?
David: Good morning, absolutely, Matthew. I enjoyed being with you down at the World Health Care Congress, and I understand you’re going to be there again this year.
Matthew: I’ll be looking forward to it. Anybody that’s listening can come by. I’ll be doing some blogging from there all three days.
Matthew: Let’s start with the real basics. I know that Best Doctors is a referral service and a second opinion service, and it’s obviously a lot more than that, but that’s, I believe, what it is at its core. For those readers of The Health Care Blog who are a bit more casual, can you just give the basic introduction to what you do, what problem you’re solving, and how you solve it?
David: Yes, absolutely. Best Doctors is a global organization located with a presence in 30 countries around the world. It was originated by physicians from Harvard Medical School in the late 80s. What these physicians were seeing were many patients coming from around the US, and from other countries, to the Boston area, in search of the best information or the best medical care. They realized, back in the late 80s, that nine out of 10 of these patients could’ve, should’ve, stayed home with their local providers. Again, what they were looking for was what they thought would be access to better a quality of care and treatment. What we pioneered was a database of 50,000 of the world’s leading physicians in over 420 sub‑specialties of medicine. We tap into these physicians to really help us provide a comprehensive clinical review of serious or complex medical cases, and we really identify a correct diagnosis or course of treatment over 60 percent of the times in the cases that we’re doing, particularly here in the US. Once again, Best Doctors, we’re a global resource‑‑a trusted resource‑‑to help people with serious illnesses access the best medical care, without having to leave their local physician or local environment.
we have built our services into the programs of over 260 insurers
around the world, such as AIG and Liberty Mutual. We have now entered
the market to commercialize our products directly to employers as an
employee benefit. There’s a wonderful perception that, as employees are
looking for access to higher quality solutions in health care, and as
employers are trying to find solutions without having to really incur
more medical expenses, Best Doctors is the solution for that.
OK. That’s great. Let’s talk a bit about how it actually works in
practice, and then we’ll go back to how you sell it and how people
access it later. So, I am a patient, I have a heart attack or whatever
condition that comes up, and I’m kind of concerned. I have a local
physician I go to, and they have specialists in the area they refer me
to. How do I get from there, to Best Doctors, and why would I get from
there, to Best Doctors?
Well, the first step we’re taking is, we are building our brand as a
trusted resource. We’ve entered into agreements with many large
employers that are offering us as a benefit, where every one of the
employees is provided with a health protection card and a fulfillment
kit education. So, somebody that’s diagnosed with a serious illness,
such as a sarcoma, most of us would say, ‘Is the diagnosis correct? Is
the doctor the best in class? What alternative treatments are out
there?’ Every one of the employees has access to us through a toll‑free
number, to talk to one of our clinicians, which are generally nurses.We
collect all of the data around the patient‑‑and I’ll just get into the
specifics: We’re obviously hitting the compliance, we’re having the
patient sign release forms, and we’re reaching out to the providers.
Basically, we’re integrating all of the information over many
disciplines and many providers, we’re taking in the information,
building that into our system, to some extent‑‑and that’s where the
technology comes in, which would be a personal health record.We’re
putting it through a medical analytical process in our algorithms,
really, to dissect the information, to ask the right questions, and to
organize it with precision. Then pass it out to the back end, to one of
the 50,000 doctors, to help render the opinions and empower the
treating physicians to do the right things.
Going back to that point where I’m diagnosed‑‑I go to my GP or
whatever and get passed to the local specialist‑‑am I likely to get to
the Best Doctors 800 number, because I happened to notice it was part
of this little health plan my employer gave me, or do you work more
closely with physicians in the local community, for them to refer on to
you? I’m trying to figure out where you sort of intersect with the
local medical community.
We are building the brand in the access to our services, or awareness,
let’s say, with the employee?’ As far as reaching out to the local
treating physicians, it’s really done on a case‑by‑case basis, although
we do have a lot of recognition by physicians that are out there. I’m
not sure if you’ve seen, on the city magazines, the presence of a Best
Doctors database. These are the lists that we’ve actually pushed out to
these different magazines, so we’re creating a lot of awareness for the
physician community. With or without that awareness, again, the process
entails bringing in information, dissecting it, organizing it, and
having the best doctor render an opinion on their letterhead, to then
push to the treating physician in a very collegial way. We’re
empowering physicians around the world to do the right thing.
But in general‑‑let’s go to the other side of this, which is how
you’re selling the service: Does it work on, you sell the concept and
the service to an employer, or to one of those insurance companies or
an organization like that; and then, are they paying you on a
per‑member basis, or do you get paid every time someone accesses your
system, and then you pass some of that money off to the doctors you’re
working with? What are the economics of the business?
As an employee benefit, we would be entered into an agreement with the
employer, on a per employee, per month basis. Somewhat like insurance,
those that would want to access our services for a higher level of
medical opinion would, again, pick up the phone and call Best Doctors.
In regards to the case work we’re doing on the back end, we are in
agreements with the physicians; the best doctors that we’re using in
our database are under structure for payment and case fees per case.
OK, so is there an extra fee, or is there some way you can bill some
of this out to other insurers, to primary insurance, from the employer
end? Or is it basically the employers paying so much per member, per
month, or whatever it is, and out of that, you’re covering the case
rates back to your physicians that you’re referring to?
As far as the fees, we are covered mostly by the employers, but we do
have insurers and health plans that are paying us, as well. It could be
a combination of both, or it could be that the employer is saying that
we’re an important client, and you will coordinate with Best Doctors
and pay the fees for this service. We’re seeing that happen more and
more in the industry, and we do have, as I mentioned, large insurers
and health plans as clients.
I’m with you. So you might see some employer say to ‑ I’m making this
up, but you might have a big consulting company with a lot of high paid
employees saying to Aetna, or whoever their national TPA is, that we’re
going to have Best Doctors as one of the options we’re selecting, along
with, say, Disease Management and Wellness, it’s
coming out of our self‑insured account, but you’re going to administer
this and we’re going to pay for the secondary opinions as part of the
deal and you work with the two of them.
That’s correct. Just to answer that other question, as far as how do
we intake and locate the patients again, there’s a lot of awareness.
We’ve actually had third parties document that within our clients is
100% awareness, as far as this is a benefit, this is something they’d
want to reach out to as a trusted resource. But of course there are
those patients that may, for whatever reason not participate or want to
participate, as far as reaching out to those doctors. And so we’re able
to connect on the back end of our health care providers or partners, to
really reach out. And that could be a connection through what would be
any predictive modeling, or any disease management or any case
management tools organization that they’re working with. So, in effect
we’re able to then really laser focus on those that would need us,
because we’re aware of cases that might be future train wrecks‑ the
high cost illnesses in the future.
Now, that’s pretty interesting. So does that mean say if I’m one of
these typical employees and I’m in the self‑insured plan and I go to my
doctor and the doctor diagnoses me with some dreadful disease and I go
to the specialist that the local doctor recommends, but you may
actually end up being alerted by the TPA that this has happened. Would
you go to the employee, the patient in that case, or would you go to
the specialist, and say "Hey, we’ve taken a look at this and we’d like
to come in and give you a second opinion."?
Yes, what we’d normally do is we’d contact with one of our clinicians
the patient, or the employee, create the relationship and with their
approval then collect the information that most of it’s already,
hopefully, within the TPA or the system that they’re using as far as
collecting information. But we’re reaching out to the providers, again
integrating what’s fragmented ‑ we’re taking a very high‑level
multidisciplinary approach to analyzing the data, dissecting it and
really asking the right questions.
Now that’s pretty interesting. How are you finding your relationship
when that happens. Let me back up. So I’m now a patient, I’m in the
medical system locally, but because I have Best Doctors I may not have
accessed it, but I am now getting a call from somebody at Best Doctors.
What’s the next step there? Can they either say "Yeah, this sounds
interesting, I’d like a second opinion, go confer with my clinicians to
find out what they’re doing, " or can they at that point say "No, I’m
not interested. I’m quite happy with the local guys I’m working with."
How does that work at that point?
Of course they do have the option to opt out of the service, but the
majority, from what we’ve seen statistically, these patients are
looking for solutions. They’re online researching it through the
Internet. They’re questioning if their diagnosis is correct and they
have the right physician. It’s very easy for us to build that
relationship: "Hi I’m Nurse Peggy, I’m a benefit from your employer and
your insurer and I’m here to help."
Right. Now, that makes a lot of sense to me as a patient then. I
assume there’s not always 100% wild enthusiasm from their current
physicians about this service. How are you finding that?
Actually, Matthew, that’s what we thought would happen. The
originators of our company felt that the physicians in the community
would lynch us for trying to poke into their business. But we were very
pleased to find that that’s rarely the case. In fact I have a little
note here that I just received from a president out in California of
one of our client companies. She writes that the compassion and
competent ‑ well, let’s just get right to the point. The contact with
the physician immediately reduced everybody’s stress. The local Kaiser
doctor welcomed the contact with a medical expert whose reputation was
well‑known. And that’s what we’re finding ‑ that the physicians,
particularly the primary docs, are overwhelmed. There’s not enough
access to the information. There’s not enough time to really take a
holistic approach to their patient. And so we’re doing a lot of the
grunt work to compile the information and to really reach out to the
best specialists. Because we’re using someone at the level of Peter
Black for brain tumors or Dr. Calkins for right ventricular
arrythmogenic dysplasia it’s very easy for the physicians to respect
this approach and to welcome the information. In the end we’ve really
demonstrated that doctors do want to do the right thing. The question
is do they know how to get access to the right information, and do they
have the time to integrate what’s fragmented.
Yeah, and that’s the sort of best‑case scenario. Let me ask you the
ugly question though, which is let’s say that there was going to be a
result of the scenario is that either a local physician was going to do
a procedure, which might have been a high‑paying procedure for them.
You just read an example from a Kaiser doc so that’s a little bit
different. Typically you have fee‑for‑service. Let’s
take the example that’s going on right at the moment: somebody comes in
and has angina, and there are lots of places in the country where the
local cardiologists are ready to say "You need an angiogram with a
stent ." And we’ve just seen this big study saying basically that’s not
the right answer. When you have a division of opinion like that either
you may be advising somebody not to get a procedure which might be
paying the local doctors some money, or alternatively do you ever
advise them to go somewhere else, and talk about changing referral
patterns? Is that ever a source of conflict, or is that not something
I think that as far as that scenario, it’s really a small percent of
the types of cases, as far as our experience that we’re confronted
with. The majority ‑ I’ll give you an example of a case or two that
perhaps exemplifies that. We had a woman that was 32 year old who went
blind over a period of months, was diagnosed with a brain tumor. I
remember looking at the MRI that there was this mass in her brain and
the nurse case manager was preparing an operation for Monday ‑ this was
Friday at 4:00. We took in all the information, organized and analyzed
it and went to one of the best neurosurgeons who said they didn’t do
all the exams so there are three or four things they have to do, and
there’s a possibility that it might be a rare inflammatory illness
called Sarcoidosis. Sure enough, after using our protocols in Best
Practices, the woman got her sight back and avoided a major procedure
of open head surgery. That’s a case where perhaps the local
physician… I find it hard to believe that the local physician,
knowing that there was a misdiagnosis, would have gone ahead and
operated on the patient.
That was a question where they hadn’t done as many diagnostic tests as
perhaps they might have done, you know as the best practices in your
Matthew: Is that really what was going on?
So yeah, that is true. Obviously the cynics among us ‑ well, me ‑
believe that frequently you’re going to see that there is large
variations in treatment between different regions, and lot of this is
driven by some of the economic incentives. I mean, you look at back
surgery, and to a certain extent cardio…
Yeah, that’s a great example. That surgery is a great example, we have
build programs to qualify doctors for outcomes related to back surgery
procedures. And as we build the relationships with the employees and
individuals, we’re a able to support and confront diagnoses, and even
direct them to the doctor’s that do have that outcome. And we do know
of some doctors that are very aggressive with their surgical practices.
We’ve done a lot of research to determine if the outcomes are better,
and we found out that that’s not necessarily the case. So the bottom
the line is that if we do have a sentinel factor or if we are
intervening, the bottom line is that we focused on producing the best
outcomes and quality for the patients that are involved.
Yeah, and I think it’s very difficult to argue with that. And there
are obviously some economics incentives, but I’m basically with you. I
think a lot of the cases where physicians and others in practice,
haven’t had the time to look at necessarily either be exactly up
with… or exactly know where they are in relation to best practices.
And I think, you know, that the data we’ve seen coming from RAND and
others, is that we’re kind of all over the map on the practices. And so
if you have a second opinion, It’s not surprising that in many cases
it’s going to be different. And actually I read somewhere that 35 or 40
percent of second opinions are actually across the nation were
different, it was a very high disconnect between the first opinion and
the second opinion. Maybe you have some better numbers.
We know what the New England Journal discovered in their research,
which was on average about twenty percent misdiagnosis and over sixty
percent a change in protocols. I think they have also documented that
only 55 percent of people are receiving the right care.
Matthew: Yeah, that’s the RAND stuff which is pretty horrific numbers if you think about it.
Yeah, and again, it’s what we see as far as our results, it’s scary.
But we’re not necessarily blaming the doctors, it’s just a problem with
the system, perhaps a failure to integrate all of the information’s out
there. Or a failure to have the time to take a multi‑disciplinary
approach, looking at only the inter‑related cohabitates, it’s
difficult. I don’t want to bore you, but we just looked over the
records for my mother who was diagnosed with Parkinson’s. She’s 77,
she’s gone to five different providers, primary docs and the
specialists, the first thing we found out was that she was
misdiagnosed, it’s not Parkinson’s, it’s an a-typical Parkinson’s. So
the stolamo that she was being given was really not helping her, in
fact if anything it had counter‑reactions. She was also being
over‑medicated for hypertension and high‑cholesterol. And again, we’re
not faulting the primary doctor in the system, it’s just the question
of really taking in all of the information, perhaps going to an
inter‑disciplinary geriatric specialist and evaluating what has to be
done. And so that’s the big problem that we are seeing in health-care
today, and we’re very happy to have options, because we are providing a
solution to that and helping people.
think that the concept is a great one, it’s very hard for anybody to
argue with the concept of what’s been done. And there are clearly
massive problems around this lack of care coordination, and we’ve seen
different approaches to this at different levels. And I’ve run into the
folks of MDVIP who have the concept of basically putting a primary care
doc in that role of concierge, there are now concierge health coaches
at some of the health plans, it’s clear that this kind of role to be
the patient advocate somehow is going to be played more and more in the
Let’s talk a bit about the scalability of your model for doing that.
And there are two thing that I’m thinking of. One; is the cost for this
to be an affordable, you know, possibly cost-reducing trend within
health care? So how can people access a best doctors type service cost
wise, and is there a model that… I’m asking a lot of questions, but
my assumption is that this is a fairly high‑end employee benefit, and
the question is can it go quote end quote ‘Down market’ or ‘Mass
market’? And the second issue, which is one I’m very interested in, is
that a lot of this in my understanding seems to be problematic, based
on accessing data and information, specifically clinical records.
mean there was a good article in the Wall Street Journal a while back
about somebody who was using the Cleveland Clinic’s second opinion. and
the complications they had getting the data together. So let’s talk
about those two strands, for the first one give me a ballpark for what
this service costs, do you save enough money that it’s kind of a ‘Free
Service’ quote unquote, by saving at the backend for employers? Or is
this really something that’s only for the Wall Street employees and the
high‑class law firm employees who are all more than mass market?
Great questions. Our business model is really centered on providing
everyone with access to our services, and that’s our goal. To give you
an example of that, we entered into Canada about three years ago, and
today we cover a little more than ten percent of their population,
about three to four million lives. As far as how we are to organize and
scale the process, we are focused on the top one to three percent of
the population, that represents about 35 percents of medical expenses.
And so although it is intense at this point, because about 80 percent
of what we’re collecting is through paper versus what’s electronic,
perhaps even 90 percent, and that’s the labor intensive part. We’re
able to scale this because we have an analytical process, our
algorithms are focused on the most serious catastrophic high‑cost
illnesses. So we’re largely focused on what we’re good at, and what
represents a big impact financially for the employers. As far as the
pricing model, it’s a few dollars on average per employee or per
member, and that translates into—I’m not a big fan of ROI’s, because
I’ve seen what it has done to the disease management industry—but
there are many third party groups, particularly the benefit
consultants, that have put us to the scrutiny, that’s we hired
consultants, to document that it’s a wonderful ROI.I’ll give
you an example of that, one of the largest re‑insurers in the world
reviewed 465 cases which were trauma cases where we did out
intervention, and we had an impact on those cases. Not only of
improving quality and outcomes, but reducing medical expenses during
the acute stage by over $265,000 per case, as well as another 60,000 in
rehab.So that translates into the opportunity to be more competitive,
as far as price in the market, to be fair with the employers that are
screaming about these increases. It’s a good model; everybody wins.
Have you gone to the stage of saying that you’ll provide the service
for free to an employer if, basically, you’ve got to share the back end
savings? Have you gone that route? I know that some of the DM companies
Yeah. We’ve actually structured a few of our contracts under
performance guarantees. We’re happy to do that. I think that most of
the employers that have signed up‑‑Pepsi, ConAgra, and Merrill Lynch,
to name a few‑‑really just look at this as a wonderful benefit to give
across the board. EMC, here in Massachusetts, just came on, and they’ve
had a wonderful reception by employees, saying, ‘This is just a great
benefit to have access to.’ To them, the savings are important, but
what’s more important is just increasing access to quality and
Can you give us some sense of the scale of the company now? How many
employers and customer groups do you have, and do you have any sense
about your level of employees and tax revenue and growth, and that kind
We have about 260 insurance clients. We have behind them thousands‑‑or
tens of thousands, even‑‑employees that our clients have there. We’ve
calculated that it represents, on average, we would say, about 10
million lives. Utilization, as far as case
work, on average might be, as I said, one to three percent of the
population. As far as scalability, we’re able to manage that process
with a team of about 120 employees, 80 physicians that we’ve trained
that are all practicing physicians that are working around the area,
with the Harvard facilities. Then we access our 50,000 doctors on the
back end; these are the best doctors, that we talked about, in the
database. Now, you’ve mentioned something about the personal health
records, or I think you mentioned something about accessing information
and what is going to help us…
Yeah, but let me rephrase that question. I think that’s a pretty
important one, because that has some pretty wide implications. Let me
paint you a picture of a future that there are some organizations and
entrepreneurial physicians who think we’re going to end up at: Once I,
as an individual patient, have gotten all my records‑‑not just the
admin records, but my clinical records‑‑in some kind of electronic
format that I control, I can now start moving that around. So I can
now, instead of having to gather it together‑‑speaking personally, if
you look under my bed, I still have the MRIs from when I trashed my
knee three years ago, skiing…
Luckily, I happen to have that, but most people probably wouldn’t. If
I then had another problem with my knee, I’d have to go and figure out
which knee surgeon I saw, and where I got it, and rattle this stuff up.
I know that, for people with serious illnesses, getting this stuff
together‑‑getting the images, the reports, the lab tests, and that
stuff together‑‑is a nightmare. Let’s assume
that that’s all taken care of, and we’ve now figured out how to put all
this data together‑‑which is a huge assumption, I know. There
are a lot of people saying, ‘Well, in that case, why would I be
constrained to my local services? At this point, I would be going to
the best physician or the best provider group that is best in dealing
with knees, or cancer, or whatever. And this
is kind of the vision behind the Porter and Teisberg book, which, by
the way, I’ve criticized heavily in my blog for other reasons.
But that’s kind of the vision behind that, and it’s kind of the vision
behind the Cleveland Clinic Online Second Opinion service. It strikes
me that, in that world, a loose network of physicians, where they
coordinate, as such, as the best doctors, has the potential to scale
much more greatly than what you’re in now, and perhaps, really, to
change the way health care is delivered. That’s a long‑range vision‑‑I
don’t know if that’s something you buy into‑‑but it seems to me that
the information collection, whether you call it a personal health
record, or information exchange, or whatever you want to call it, that
seems to be a major stumbling block to actually turbo‑charging the,
quote‑unquote, ‘second opinion business.’ Is that a fair comment, or is
I think that’s a great observation. What we’re finding today, and the
challenge that we’re faced with, as far as collecting information…
You see a lot of initiatives out there with: I think you mentioned
MedDecision; McKesson’s involves TriZetto; there are some employers
that are involved in the Dossia program; and I think Active Health’s
taking an initiative behind this to aggregate all the information.
We’re on top of that, and we are really looking at what’s out there,
but there has yet to be a standard process across the board, something
that satisfies what we’re looking for. Surely, as these systems evolve
and become standard across all the providers and hospitals, it will
compress the time that it takes for us to collect information, and as
you say, catapult second opinion into the next level of growth. But it
hasn’t limited what we’re doing, which is, again, at this time, focused
on the most serious, high‑cost illnesses which are manageable under our
process.I think the other question that comes into my mind,
regarding collecting data: As these companies, such as Active Health,
perfect their formats to really integrate data on a timely
basis‑‑instead of, perhaps, on the back end with claims‑‑and as the
algorithms for predictive modeling make improvements, we’re going to be
able to really be majorly focused on what we’re focused on, which is
the more serious illnesses and information that we’d have to collect
around that. It’s a good observation. We are
not dependent at this time, but it’s something that’s truly going to
transform the industry, and we’re looking forward to that.
In that case, do you think that what you’re doing‑‑there are other
organizations who are going down the similar path, but no one quite has
your name, in terms of the second opinion type service‑‑but that kind
of service, do you think it will get integrated into being a much more
mainstream part of, either health plans or provider organizations? What
do you think the impact is going to be on the local markets of
specialty care‑‑which is really what we’re talking about‑‑where most of
this stuff currently gets treated?
David: I first want to make just a statement about second opinion versus where I think we are, as far as our space.
I think the organizations that are out there doing second opinion are,
as you say, finding it difficult, perhaps, to collect records. I’m not
quite sure at what level they are pushing their records to, what
physicians, or what processes‑‑whether it be analytical or
algorithms‑‑they’re using to really dissect that information. As far as
the purpose of Best Doctors, what we do is, first and foremost, to
confirm that a diagnosis is correct. I really have yet to see any
organizations out there that are doing that to the level that we’re
doing with the doctors that are renowned for their different
sub-specialties. Is this going to become mainstream? The reception that
we have‑‑with whether its insurers, employers, health plans, or even
individuals‑‑has been tremendous. So there’s a need for it. I remember
hearing from, I think it was Mark McClellan, the former head of CMS,
McClellan, talking about one of the solutions for what he sees in
healthcare, is to finally have a national branded trusted resource that
empowers patients with the right information. Sounds like a cliché but
I believe it’s just right on. So the opportunity is tremendous where
were focused on that, we’re really excited about what were doing, and I
think to a lot of people out there that understand and really get it as
far as the leap forward for this approach.
But if you’re currently mostly referring people back to the local
specialists, and you’re discussing with them what the best course of
action is, do you foresee a time when you might actually sort of adopt
the next phase? Which is to say OK, well, here’s our preferred brand
of, you know, here’s our preferred franchise or brand of specialist,
which may be a national or a regional player in that… I’m trying to…
David: Oh, I hear you. As far as developing different tiered structures of providers…
What I’m basically saying, is it the case that I’m now, five years
down the road, ten years down the road, I’m going to have my
information in one place. And then instead of going to, just as every
other business in America has changed, instead of going to local person
who my physician plays golf with, I’m going to go the equivalent of
Merrill Lynch or whatever, right?
So instead of the local stockbroker, I’m actually going to go off to a
national franchised branded business, that’s not only going to tell me
where to go but also quote unquote sell me their in‑house mutual fund.
I’m wondering if you are going to end up with your selection of the
best branded physicians in that region, and maybe that they’re the
people who are going to end up, you know, you will have a diagnosis
function, and you’ll also have a procedural function, and a treatment
function where you’ll say these are the best places and people to go
to. You’ve kind of got the data on that but you haven’t gone to the
next step, which is to actually formally steer people around. Maybe
that is the next step.
You know, that’s a great question. I think it would take some time to
bring some bodies together around that. But as far as the business
model today, and I believe we support this model, it’s to empower
physicians, local physicians around the world, with the best practices,
protocol information, and to support them in a very collegial way to do
the right thing. So that’s different than building a database and
saying these are the doctors that you should be going to for these
types of procedures. Of course if there’s a doctor that doesn’t have
the skill‑set to repair the bile duct, for example that might affect a
liver, we would surely be able to reposition a patient with a more
skilled physician in order to avoid a transplant. That’s what we are
doing today. So again, it’s to empower physicians as we have done
around the world with the best practices. And ultimately the treatment
and the outcome is dependent on the physician and their skill‑set.
Matthew: That’s a very diplomatic answer.
David: Yeah. It’s what we do.
I love it when I talk to these CEOs. I’m always saying "Hey, don’t you
think you could do this?" and they go, "Hang on, I have to run my
company for the next month or two without actually upsetting too many
of our key people."
We’ve been asked many times to give us your database, help us
build‑‑and I’m talking about health plans‑‑help us build some sort of
tiered network, let’s cross‑reference. And again, for us to just say…
This is the danger; for it to be used as a tool to direct people
without even understanding what the implications are or the correct
diagnosis, to say, "Oh, you think you have Parkinson’s. Well, go to
this specialist in the database," that’s not our business model. Let’s
take in the information, hopefully in the future, electronically. Let’s
scrub it; let’s dissect it. Let’s empower the doctors that we trust or
the doctors that the patient trusts in network with the right
protocols, and let’s make sure there is adherence or compliance, and a
better outcome on the back end.
That’s highly justifiable, and actually given the current state of
health care and the way that medical care operates, which is local
community based and an area where we’re trying to raise all the boats
on the same tide, if that makes sense. I think it’s a strong principle.
Obviously your growth and success so far shows that there’s certainly a
big place for that. Just on that point, where are you sort of
growth‑wise, and how old? You mentioned the company was founded in the
very late 80s. But tell me a bit about your sort of recent growth and
your plans for the future. I think you guys are privately held, so I
assume that there is some potential for outcome there as well. So why
don’t you talk a bit about the current state of the business.
The originators, again physicians, who are helping people around the
world, turned it into a real business by bringing in a management team
in the mid ’90s. And I think at that time it was more focused on a,
call it consumer‑driven or dot‑com model, which was reconfigured in
2000, and that’s when I came in with a new management team here. Since
2000 our compounded annual growth rate has been north of 40 percent
over those years. And we’ll exceed about $40 million in revenues this
year. We’ve been profitable for three years. Cash flow positive. We
control the company as insiders, founders and management fully diluted
about 60 percent. And as far as outside investors, it includes… I
forgot to mention that prior to 2001 we were known as Health Resources
and Technology, and we saw the need to acquire the key asset which is
the database of doctors as well the brand of those doctors. So we
acquired that company from Polaris Ventures in Silos in 2001. And by
the way, I think those were the same investors that Silos with other
groups that are out there such as Definity and Active Health. So
the growth has been tremendous. We built most of our growth with our
own cash; we do have two smaller investors. One is Munich Re, which is
one of the largest re‑insurers in the world. We did take in some money
from a small group of investors including Aetna Ventures; they wanted
to get a peep into what we were doing. I think really around the time
that they bought Active Health. But again, we’re very happy because we
control what we’re doing, we’re investing for growth and quality, and
that’s what the future holds.
That’s right. To be in charge of your own destiny is something not
many companies, especially of your size and your growth rate, can
really talk about.
I have a few friends who are CEOs of smaller companies who are
desperate to go lie on the beach, but for some reason their venture
guys won’t let them.
[laughs] There you go. Maybe one day. We’re pretty happy. We’re happy
to be here, we enjoy what we do, and we like helping people around the
OK. That’s great. Well, it’s been great talking. I’ve been talking
with David Seligman, who is the CEO of Best Doctors, a Boston based‑‑I
was going to say second‑opinion company, but much more than that.
David: Thank you.
David’s been with me over the last 40 minutes or so. David, thank you
very much for your time today and thanks for telling the Health Care
Blog readers about your organization.
David: It was a real pleasure to be here Matthew, thank you very much for your time.