Launching Aledade

farzad_mostashariToday, I’m launching a new company, called Aledade.

Aledade partners with independent primary care physicians to make it easy and inexpensive for them to form and join Accountable Care Organizations (ACO) in which doctors are paid to deliver the best care, not the most care.

This is good for patients who will find that their trusted primary care doctors are more available and better informed than ever before. It’s good for doctors who want to practice the best medicine possible, the way they always wanted to. It’s good for businesses and health plans looking for healthcare partners that deliver the highest possible value and outcomes. And it’s good for the country as higher quality, lower cost care will help lessen the strain on our budget and our economy.

The world of start-ups may not be the usual path for those leaving a senior federal post, but it’s the right decision.

For me, Health IT was never the “ends,” but a “means” to better health and better care, and I continue to believe that better data and technology is the key to a successful transformation of health care. And it is why the attempts to do so now can succeed, where they have failed before.

Empowering doctors on the frontlines of medicine with cutting edge technology that helps them understand and improve the health of all their patients- that is the mission of our new company, and one that has animated my entire career. 

During the seven years I spent working for Tom Frieden and Mike Bloomberg in NYC, it was exhilarating to be able to push the frontier in what was possible — to innovate at the edge.

Working with my team, we were able to: invent new statistical methods for outbreak detection develop new data visualization methodscreate visibility into population healthdown to the neighborhood level, bring decision support and rapid diagnostics to the point of care, automate electronic quality measurement, and implement novel financial incentives and hands-on technical assistance to support care transformation in small independent primary care practices. It was exhilarating.

When I moved to HHS in 2009, the transition to federal service also meant a change in perspective.

As the National Coordinator for Health IT, my key responsibility was now to ensure a minimum national “floor.” We had to push the country as a whole towards a commoncore set of data and capabilities. We applied creativity and grit to do what needed to be done, using the best tools available to us: encouraging the private sector; organizing and scaling state and local efforts like the inspiring work of the regional extension centers; and — yes — through the blunt instrument of regulations too.

I’m extremely proud of the work we did, and the foundation we put in place. The country is in a massively different place, and the age of data has finally come to healthcare. But in that role, I was also acutely aware of the compromises and incremental half-steps that have to be taken when the goal is to move an entire nation. I was inspired by those that pursued improvement not “compliance” and did not mistake the floor for a ceiling.

I’ve had the good fortune for the past nine months to be ensconced among some truly great thinkers at the Brookings Institution, and to go on a “walkabout” – talking to and visiting with leading practitioners throughout healthcare. I have come away with a rare stereoscopic view of the changes sweeping through health care — the anxiety of those with “one foot on their old business model’s grave and the other foot on their new business model’s banana peel”, mingled with the excitement of those who would disrupt the status quo.

And during this process, I have also found my cause.

It’s to help independent primary care doctors re-design their practices, and re-imagine their future. It’s to put primary care back in control of health care, with 21st century data analytics and technology tools. It’s to support them with people who will stand beside them, with no interests other than theirs in mind. It’s to promote new partnerships built on mutual respect, and business arrangements that will truly reward them for the value that they uniquely can bring- in better care coordination, management of chronic diseases, and preventing disease and suffering. It’s to achieve lower cost through better care and better health.

I believe in this. And this is the mission of our new company. And to realize it, we will be back at the vanguard, helping to lead this transformation in health care that has been underway for years but is quickening and coming faster than ever before.


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21 replies »

  1. Farzad, methinks you’ve been crunching numbers and pulling synonyms around too much to re-name the essential gist of the game. The “best” care in your language means the least care. Put on a stethoscope, see some patients, and work in a private clinic for a day. You will see how demoralizing the ACO/HMO situation is and it won’t go anywhere good.

  2. I really appreciate the incentive taken by you. If your company is able to bring the healthcare costs in our country down by even a very insignificant percentage also it would be a great help. Primary care is important and its good someone realizes this and is taking the right initiatives

  3. @allan:
    I don’t charge for EKG or PFT. Part of the monthly payment (as are suturing, etc). If patient needs testing (labs, radiology, procedure) we either do a lower fee cash-price which we’ve negotiated (some of the consultants have a cheaper cash price). I charge the same regardless of insurance or lack of it. When I refer patients for procedures, labs, etc, insurance (including Medicare and Medicaid) pay just fine for them.

    • Rob, I consider you a healthcare hero for acting independently and attempting to provide care within the structure of the willing buyer and willing seller. I like many different approaches competing with one another so I don’t make a value judgement as to which is better except when the model can be detrimental to the patient. Is this your own model or did you adapt it from somewhere else? I would like to read more about your model if you have any net sources for it.

      Dr. Mostashari’s plan does not fall within the willing buyer and willing seller parameter’s. That magnifies the potential problems faced by patients. Since the bad incentives of the ACO model are left undiscussed likely because no solution has been found the ACO model has to continue to be considered dangerous.

  4. And we all saw how well your work in EMRs turned out: many new systems, all unable to communicate with one another. Good luck, to you and especially your investors.

  5. I would like to submit the following brief article entitled, “Why you should want your doctor to join an ACO so that your doctor can benefit by receiving a portion of your insurance premium as a reward for limiting your choices in healthcare services.”
    Like I said, brief. Very brief

    • “so that your doctor can benefit by receiving a portion of your insurance premium as a reward for limiting your choices in healthcare services.”

      Hopefully it’s not about limiting choices but making the correct choices. I don’t think Rob “limits” patient access, he hopefully saves them part of the monthly premium to him by reducing their OOP for unnecessary care.

      The only objection I have to Rob’s model is it charges the patient extra for something the doc should be doing anyway – and in the macro sense limits access to quality PCPs.

      • Peter1: Agree with the caution about the macro sense – which is why I am working to get the total number of patients in my practice up over 1000 in the big picture. I really want DPC to be a viable alternative model, not an escape for physicians wishing a better life for themselves and a limited number of patients.

        Regarding charging extra, I really feel the payment from the patient makes all the difference. They once again become true consumers to whom I am accountable. If I don’t give them value, they leave. For most of my patients the value of my care seems to far exceed my charge. There are lots of ways to give people value in my setting: cheaper drugs, cheaper labs, avoiding ER, spending 5-10 minutes in my office, or avoiding visits altogether. Mostly, however, people simply like that I am accessible.

        In the end it is pure economics: other docs don’t take the time to give care that produces real value to patients because they lose money when they do so (i.e. The patient stays healthy or gets answers outside of an office visit). In my practice I am rewarded with an empty office and the opportunity to grow the business more. ACO’s attempt to reward for better outcomes, but do so by increased complexity and without fixing the underlying problem: the system rewards problems and procedures, not health.

        • Rob, it appears that you are charging patients about $600 per year which is fine. You have a right to sell your services and your intellectual property. Do you also collect insurance from the patients? If you do and also have Medicare patients how do you get around the Medicare laws?

          What services do you provide before there is a charge assuming that you do not get paid by their insurers? Are you doing this independently or through a group like VIP?

          From the little I am hearing your model is far superior to that of the ACO, but the Stark Laws prevent you from combining certain efforts with other physicians. The Stark Laws were ‘supposed’ to protect patients and now the ACO is a way to bypass such laws. Funny how certain practices are considered dangerous to patients when individuals are involved, but as soon as the elites send in the bean counters and create things like ACO’s the Stark Laws are found to be unnecessary.

          I am waiting for someone to explain how the ACO gets rid of the bad incentives that cause patients to suffer, but so far that is always left out of the ACO promotor’s explanations.

          • 1. I accept no insurance payments.
            2. All charges apart from the monthly fee are the “at cost” charge for services, such as lab tests (which is quite low: $5 for CBC, Etc)
            3. If a patient comes in over 8x/month, they are charged a visit fee. I put this in more to protect me from being seen by insurance commissioner to be offering insurance. No patients have come close to 8/month (which is why I chose that level).
            4. About 1/2 of my patients have insurance, maybe 2/3. Some have Medicare, and these patients sign a disclosure statement which Medicare requires – basically explaining to them I won’t be charging Medicare and they are responsible for my fees. I do this because I opted out, which gets me around the laws. I probably have 20 families who are either Medicare or Medicaid, maybe more.
            5. The concept of ACO is to incentivize the organizations to improve communication and patient follow-up so as to avoid “bad events” such as re-admission. It essentially gives the docs a cut of the savings the payor sees, which motivates more efficient processes. Again, I am not against the basic concept of ACOs; I just think they suffer from excessive complexity.
            6. I am doing this independently (talking a lot to other docs who have done this), not using something like MDVIP. I don’t like the typical concierge approach that emphasizes excessive procedures and services to justify the higher cost. I give value. My patients stay away from the ER, don’t get unnecessary tests, and stay away from care they don’t need. We do this through high accessibility. It works. It’s MUCH better for patients, and my nurses and me would never want to go back.

          • Excellent.

            I assume you are an internist. Where do the charges start? EKG, X-Ray, PFT, echo, injection etc. Do you send your patients out to perform such tests?

            8X/mo. That is smart. What do the attorney’s say?

            You don’t accept Medicare. What is happening with the attempt to prevent you from ordering tests and having them be paid for by Medicare?

            An ACO is more powerful than an HMO yet has the same incentive to deny care while leaving no paper trail. Eventually it falls prey to the bean counters. Very dangerous. One of the most important studies on HMO’s was by Ware, The conclusion stated: “During the study period, elderly and poor chronically ill patients had worse physical health outcomes in HMOs than in FFS systems”. FFS included PPO’s. I can only guess based upon the PPACA that ACO’s will end up worse than HMO’s and perhaps be better disguised with more federal legal protection for certain acts that can cause harm.

            I don’t know how much experience you had studying HMO’s. My objections would be in part removed if the patient had the power and the money to choose the care he wished.

            I wish all physicians would have your independent spirit.

            Was there a web site that helped you start this? The AAPS perhaps?

          • Addendum: Do you collect any payment from your insured non Medicare patients?

      • “Hopefully it’s not about limiting choices but making the correct choices”
        While I understand this sentiment, it still rankles me that so many think they have to make the correct choice for the patient because they do not want to face a situation in which the patient might suffer (or benefit) from the consequences of their own choices. Patients aren’t that stupid, its that the system is too lazy and stubborn to provide choice.
        If I felt I had a significant back injury I would get the MRI first, protocols be darned. I would pay up front because I want to know how aggressively I can push my rehab. If I had my way I wouldn’t pre-pay for preventive services through the higher premiums coverage for those services require. I wouldn’t have out-patient coverage at all because I will never use the $$thousands this coverage requires in excess premium. I’ll pay a tax for the health care of the poor, but it is ridiculous to think that it is more efficient to redistribute my wealth by charging me a premium for services I do not want. It angers me that we seem to be in the process of tailoring our entire health care payment model on the needs of the poorest and oldest thus limiting choices for the majority. There is not one size fits all.

  6. ‘ I was inspired by those that pursued improvement not “compliance” and did not mistake the floor for a ceiling.’
    – I absolutely agree with this and support your emotion here.

    I was actually part of a large group of local independent primary care docs who formed an IPA and eventually was accepted as an ACO. We actually had some contracts in which we shared percentage of savings given to insurers (which is the essential ACO premise). I firmly believe that the preferred ACO model is for independent physicians, not hospitals, to be the central agency. Hospital involvement in anything that purports cost savings is an internal contradiction which cannot be fixed. Hospitals are the black hole into which most of the money of health care is sucked. They can’t be put in charge of cutting cost.

    Sorry that was so harsh.

    Here is my problem with this: doctors still work for insurers, not patients. I left my practice (part of that IPA) because the “big data” became far important than the “little patient.” If patients were helped, it was indirectly in that they benefitted as the data went in the “right direction.” The ACO adds another layer of complexity to an already overwhelmingly complex system.

    I am now motivated on a micro level to do what ACO’s are trying to accomplish on a macro level: accountability (to patients, since they pay me), cost savings (because I want to give them value), avoidance of unnecessary ER visits, hospitalizations, and procedures (to give them value), and open communication (because that’s what they pay me for). But I do it for about $50/person/month. We are working for the same end, but I love my job much more now than I did before I changed. Hopefully we both succeed and meet in the middle and shake hands.

    • Rob, features of the ACO are desirable, but those features are more fluff than reality when the bean counters set up shop and they always do. In your model hopefully you have set up a way of making sure that you are financially comfortable to attend to your patients the best way possible without the bean counter. The ACO has to eventually resort to saving money by denying some of the things that you freely provide.

      Take note how Dr. Mostashari has not yet answered: “How have you managed to overcome the negative incentives to deny care or deny the existence of disease when such denial does not leave a paper trail?” It is not that he isn’t trying to do good things. He just doesn’t have an answer and that means that we will see devastating things happening to patients.

    • “Sorry that was so harsh.”

      But true. The truth is always “harsh” because we don’t want to believe it.

  7. Farzad, I am all for people finding their passion and pursuing it. It’s a moment that can come at any time in life and often in a surprising manner. What’s not surprising is the belief in the ACO as the new magic bullet. We’ve seen this movie: capitation, multiple HMO models, bundled rates, unbundled rates, DRGs, RBRVS, case rates, narrow networks, yadda, yadda, yadda. All now just health policy trivia answers to the Jeopardy question “What reimbursement models were supposed to solve all our problems?”

    Make this work, Farzad. Don’t become an answer to a trivia question.

  8. “join Accountable Care Organizations (ACO) in which doctors are paid to deliver the best care, not the most care.”

    We hear this all the time. In your blog you did not touch on the ONE important issue that seems to be left out in all of the ACO grand schemes that preceded you. Incentives. How have you managed to overcome the negative incentives to deny care or deny the existence of disease when such denial does not leave a paper trail?

  9. Its always good to see people take initiative and to start a company, though one directed at independent physician practices would appear to be seeking a diminishing market niche. With medical M&A on the uptick where regional hospital systems and insurance companies are buying practices and hospitals, while forming their own ACOs, I am unsure of the value offered for an independent physician to join this type of ACO instead of one offered by their local health system.

    Thank you and best of luck.

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