Challenging the Status Quo: A conversation with Iora Health CEO Rushika Fernandopulle

January 18, 2021 by Poorwa Godbole

 Conference 2021  Medicare Advantage  Primary Care

Rushika Fernandopulle

Founded over a decade ago, Iora Health is a consumer-centric, technology-enabled provider working to “Restore Humanity to Health Care.” The company is using multidisciplinary teams to rebuild healthcare from the ground up, leveraging primary care to improve population health. Today, they focus primarily on Medicare Advantage populations, and their model has been proven to reduce hospitalizations, ER visits, and specialty care costs. The Pulse sat down with CEO Rushika Fernandopulle to learn more about the company’s history, vision, and response to the COVID-19 pandemic.

The Pulse: Can you please share a brief overview of your background and how you started Iora?

Rushika Fernandopulle: I am a primary care doctor. I went into medicine because I wanted to help heal people. When I got into the wards during medical school, I realized how screwed up the system was. Despite the really good science and tools we have, the way we deliver to people is awful. I had been a government major in college and realized that we built the system, so we can fix the system. I wanted to go do something, so I first thought I would go get an MBA. This was before most pre-MD/MBA programs, and I was literally told by people at Harvard’s medical school, “Look, son, you can be one of us or one of them.” It felt like business was the dark side, and if I went, I would not be welcome back. I ended up going to the Kennedy School for a Master of Public Policy, which was “acceptable,” but was able to cross register for a number of business school classes.

I did that, and I do still practice as a primary care doctor, while also trying to fix the system. When I first started practicing, like everyone else, I tried the incremental change model, taking existing practices and tweaking them a little bit, hoping to somehow get to nirvana. Eventually I thought maybe this premise is wrong, maybe the system is rotten to the core. What we needed was to build a vision of what this ought to be, without starting from what we already have. One of my favorite quotes is from the Cheshire Cat: “If you don’t know where you are going, any road will get you there.” I started thinking about how to build a new system of healthcare and realized instead of starting top down from hospitals, we should start closest to the consumer with primary care and build up from there.

“The focus of these new models was really centered around relationships rather than transactions. Last I checked, that’s what heals people.”

At the time I was running an inter-faculty health policy program at Harvard. On Harvard’s dime, I was able to find people who are doing cool things in primary care, brainstorm, and build a model that we thought would work better. The focus of these new models was really centered around relationships rather than transactions. Last I checked, that’s what heals people.

So that’s when I went to all the big health systems in town in Boston and asked them to let me build a new model of primary care in one of their practices. They all sort of patted me on the head and said, “That’s really interesting but our practices are full, we are making money, what’s the problem?” I said, “Well, care sucks, patients hate it, doctors hate it, we are bankrupting the country, but…”

As an entrepreneur you come to this moment where you say, “I am a doctor, I can start my own practice. I’m going to quit the day job, take a second mortgage on the house, open a practice, and try to do this.” So, in 2004, 16 years ago, I opened a practice called Renaissance Health, the rebirth of primary care. By the way, bad idea, because I can’t spell “renaissance” and neither can anyone else, but it sounded cool at the time. We started with 1 little practice in Arlington and now, as Iora, we have 47 practices across the country. About 10 years ago, we started raising some capital, and now we are trying to build these practices all over.

The Pulse: You mentioned that back in the day people were open to letting doctors explore the policy side but not so much the business side. Do you know why that disconnect existed at the time?

RF: You know, it still exists. I’m still on faculty at Harvard, and once a year they have a required health policy class for the first-year medical students to come and learn about the healthcare system. I’m often on a panel about primary care, usually with a primary care doctor at an FQHC and another from a primary care practice at the Brigham. I get beaten up by the students because I run a for-profit. Give me a break! Do you really think the Brigham is more mission-driven? I do think people are getting over the disconnect; obviously people are doing MDs and MBAs. There are plenty of people in leadership who have these degrees. To me, we have to fix the system, and we need to use all the tools we have. Is healthcare a policy question, a business question, a legal question? Well, it is all of the above, so we need to stop these silos and fix the system.

“The premise of Iora is we are going to harness capitalism to solve a social problem.”

The premise of Iora is we are going to harness capitalism to solve a social problem. All these people futzing around at non-profits where they have to spend a year getting a forty-thousand-dollar grant from RWJ is a waste of time. We are taking on a three and a half trillion-dollar system! Let’s raise capital. We have raised three hundred and fifty million dollars because we are taking on a huge system.

The Pulse: Do you have advice for others in healthcare who want to raise capital?

RF: You have to raise capital from the right people who are in sync with your values. You have to decide you are not going to do evil things like surprise billing. Don’t do that and don’t take money from people who make you do that.

You also need to have a long-term time horizon. I’ve been doing this for 16 years; one of the big problems with US Capitalism is this short-term thinking – quarterly profit statements, annual reports. In the end, the only way to improve healthcare is to make people healthier. That doesn’t happen when you snap your fingers. It’s about building relationships and changing behavior. Education is the same thing. The environment is the same thing. All the big problems we have, we can harness capitalism to solve, if we are able to have longer term time horizons.

The Pulse: As a practicing physician, what were the biggest gaps in the healthcare system you saw that inspired you to start Iora?

RF: The experience both for patients and for doctors was poor. You see physician burnout; you see people having trouble getting healthcare. Iora’s tagline is “Restoring Humanity to Healthcare.” For years healthcare has been a human thing, and we’ve added all this crap to it – RVUs, meaningful use, etc. What most people try to do in healthcare is add more stuff on. One of my other favorite quotes is from Michelangelo when asked how he makes such beautiful sculptures. He said, “It’s really simple. I take a block of stone, and chip away everything that is not the sculpture.” That’s what we have to do in healthcare.

“Experience is poor, outcomes are embarrassing, costs are obscene. We are robbing people’s paychecks, and healthcare is confiscating our wealth. All of those problems are because we’ve turned this into transactions, and the system is geared towards just doing more stuff to people, whether they want or need it or not. That’s not why I took an oath, last I checked.”

The Pulse: Iora’s model is built on team-based, value-based, and technology-enabled care. These are all huge buzz words in primary care today, and your model is proven to reduce hospitalizations and improve patient engagement. So why aren’t all providers doing the same thing? What makes Iora’s model challenging to implement and how did you overcome those challenges?

RF: The vision of care that Iora has, similar to what you said, is radically consumer-centric, value-based, and digital. It’s completely different from today’s system. You can’t do it halfway. What’s hard is to get a business model that works. The story over and over again in healthcare is someone comes up with a better way to do things like reduce readmissions, and then they get fired because they lowered revenue for their institution. That’s sort of the way it is.

You have to decide which side you are on. There’s this great saying that many people right now have one foot on the canoe and one on the dock. They are trying to do this risk-based, team-based stuff halfway, but they’ve still got a foot in the old world. The simple insight is you cannot do both. We’ve simply decided the old way does not work and stopped doing it. We refuse to take fee-for-service, we refuse to do episodes. We will do the new world, and if you like that come over here.

What we’ve done at Iora is align everything around what we want to do. The space, teams, IT system, salary model, payment model, everything is different. It’s all aligned around improving people’s health and keeping them out of trouble, not traditional fee-for-service treatment. I keep telling people at these big health systems to create a few separate practices that just do pure value-based care. To me this is obvious, but virtually no one has these types of practices. There are a few examples – Intermountain started building a few practices that are purely risk-based, we’ve done a few pilots with people, but it’s really hard.

“The enemy is the status quo, not any of us.”

The Pulse: On that note, there are a few other organizations – Oak Street Health, Cityblock – trying to achieve a similar mission to Iora’s. Iora was one of the first players innovating in primary care and has been a leader for a long time. What sets Iora apart?

RF: First of all we don’t see each other as competitors, we see each other as fellow travelers. So Iyah Romm from Cityblock, Mike Pykosz from Oak Street, Chris Chen from ChenMed, we are all friends. If you add all of us up, you get a couple percentage points of the market. We are tiny, so the enemy is the status quo, not any of us. If you look at many of the things that we all do, we do things very similarly. We build our own technology, do full-risk models, build teams, integrate behavioral health, and deal with social determinants of health. We do it because it’s the right thing to do, but we do all have different flavors.

Watch Rushika describe the 3 focus areas that set Iora apart: their clinical model, being consumer-centric, and a focus on from-the-ground-up technology:

The Pulse: On the note of technology, Iora also has its own collaborative care platform called Chirp. Can you tell us a little bit more about this product? How does it compare to a traditional EHR?

RF: By the way, an Iora is a bird from Sri Lanka, which is where I’m from originally. It’s called Chirp for a reason. We don’t think of it as an EHR. We use it as our EHR but it’s really a care collaboration platform. An EHR is a tool for you to record what you do in a visit and then bill as high as you can; it’s a cash register. Everyone who has ever used an EHR knows that the clinical stuff is an afterthought. The great news is we don’t care about that because we don’t bill per visit. What we need is a tool that helps us engage patients and manage populations. It’s really a CRM that helps us track relationships.

We are also trying to get data from everywhere. In our model, we are at full risk, so I don’t get paid just for telling you what to do. I only get paid if you actually take your blood pressure medicine, stop eating salt, and don’t get your stroke, because then you don’t go to the hospital. It’s a very different problem to solve. They are solving how to bill as much as they can for patients, as opposed to how to improve health for the population. That’s why it’s a completely different thing and we had to build it ourselves.

We need to collect data from patients, and we also need data from the world – your lab values, whether you are filling your pharmacy scripts, whether you went to the hospital. We plug into health information exchanges (HIE) in virtually every state we are in. If any of our patients show up in a hospital or an ER, it alerts us. We then talk about them in our morning huddle and send a team to go see the patient in the hospital.

When we prescribe medicine to you, we look for a feed from the PBM. If it turns out you are not filling your medication, we will ask your health coach to reach out and figure out what happened. That’s how you change behavior, and that’s what we’ve built. An IT platform, linked to a process model, linked to a people and culture.

“Shockingly, in the first 4 months of the pandemic, only 11% of Americans heard one word from their doctor. I think that’s an embarrassment. We advocated and because of that, our COVID hospitalization rate was half of what it is nationally. We saved lives doing that.”

The Pulse: Of course, COVID-19 has had a huge impact on all types of healthcare providers. This spring, Iora was a leader in shifting over most care to virtual delivery and continuing to stay connected to patients. Especially given that the majority of your patients are over 65, what were the major changes you had to make in response to COVID-19 and how will these impact your model in the long-run?

RF: We, like everyone else right when COVID hit in the middle of March, said we need to change how we practice. We need to keep our staff and patients safe. We made the decision to leave all our physical practices open because this is the biggest health problem and we are doctors; we should do that. We shifted to 93% virtual encounters literally overnight. We also proactively called every one of our patients within the first 2 weeks. One-on-one, every single patient, and said “I know you are hearing from your red-state governor that you should go to the tattoo parlor and the beach. He doesn’t mean you. You are old and sick, and you need to stay home. We are open 24/7. Come or call us anytime. Do you have enough food? Do you have enough medicine? Do you understand?” Shockingly, in the first 4 months of the pandemic, only 11% of Americans heard one word from their doctor. I think that’s an embarrassment. We advocated and because of that, our COVID hospitalization rate was half of what it is nationally. We saved lives doing that.

We then transitioned very quickly from phone to video. We have older, sicker people, so many of them needed help with video. We evolved all sorts of things. We had tablet delivery programs where a health coach would go to their house, hand them a tablet, and teach them how to use it. We FedExed tablets to people and paid for their bandwidth. We did whatever it took to be able to manage people better. At peak, 70% of our encounters were by video.

“We organize too much around our own little silos in healthcare and not around the customer.”

Many people did something like that, but then as soon as they could, they went back to in-person visits because that’s what they could bill for. If all that happens from this pandemic is we do something temporarily and go back to the way we were, we have missed an opportunity. We are never going back.

We think what is right is an omnichannel delivery model. We do 30,000 chats or emails per month with our patients. We, of course, can see you in the practice if we need to. 40% of our synchronous encounters are now in person. 60% are done through telemedicine because it’s the right thing to do. And then we have a home visit team for about 4% of our encounters. We are going to keep our visits to under 50% because we think over 50% can be done without a visit, and that’s better. COVID is an opportunity for us to do the right thing.

The Pulse: Is this shift also a desire you are hearing from your patients?

Watch Rushika’s explanation below:

The Pulse: Iora is focused on primary care, but truly managing a patient’s health journey requires specialty care as well. How does your partnership with RubiconMD – a platform for provider-provider eConsults – work to help increase access to specialty care, and how else is specialty care incorporated into the Iora model?

RF: We aren’t trying to just fix primary care; we are using primary care as a lever to fix all of healthcare. The typical patient will have their asthma managed by a pulmonologist, their hypertension by a cardiologist, their diabetes by an endocrinologist, their flu shots administered by their primary care doctor, and all these physicians just send letters to each other, which is ridiculous.

At Iora, we are going to take care of you. If we need someone’s help, we will get that, but they are consultants to us. We are not just flu-shot providers; we are coordinating your care. The dirty little secret is people have more than one disease, and you have to prioritize. We are not gatekeepers, we are concierges. Say you come to me and you have hypertension, and I’m having trouble getting your blood pressures under control. I can ping your cardiologist and say, “hey I’ve got this patient, I’ve been trying this regimen.” They’ll say, “this new drug just came out, try this.” There is zero value in that cardiologist seeing you. So that’s what Rubicon does, it’s a doctor-doctor eConsult platform, it’s great, and we use it all the time.

The next step is we will start insourcing a few specialists ourselves. We will have an Iora cardiologist or an Iora endocrinologist as we get to scale. We also create a version of Santa’s naughty and nice list that tells us who the specialists in the network are that have great service, practice in a conservative way, and communicate well with us and the patient. It’s about us curating a downstream network for our patients.

The Pulse: How does the involvement of specialists affect your payment model?

RF: We are largely what is called global risk, meaning we are on the hook for all healthcare. We are lowering healthcare spend by about 20% and reinvesting it back in primary care.

Watch Rushika describe Iora’s payment model in more detail:

The Pulse: This year’s conference theme is “Redrawing the Curve: New Paradigms in Healthcare.” Iora is clearly pushing several paradigms. What would you say are the key ways in which Iora is changing primary care and healthcare overall?

“This false dichotomy of you can do good things and be a non-profit or do evil things and be a for-profit is ridiculous. There is such an opportunity for all of us to harness capitalism. We can amass capital to solve real social problems and do it at scale. We can challenge the status quo.”

RF: The first is this idea of high-impact, relationship-based care. We need to shift our healthcare system from being a transactional model to being a relationship-based model, and we are showing how that’s done.

Number two is really moving to true value-based care. A lot of people say the words, but then they mean they are going to get a little bonus while still doing fee-for-service.

Third is focusing on the experience for patients. Value-based care is a little bit of a red herring. It is only important in that it helps pay for creating a different experience for patients and doctors.

Fourth is the idea that the technology ought to work for us not the other way around. Too often the tail is wagging the dog. We need to have technology solutions that do what we want to do, not make it harder for us to do the right thing.

And finally, this idea that we are a venture-backed for-profit that is trying to change the world. This false dichotomy of you can do good things and be a non-profit or do evil things and be a for-profit is ridiculous. There is such an opportunity for all of us to harness capitalism. We can amass capital to solve real social problems and do it at scale. We can challenge the status quo, as opposed to begging and pleading for the system to change. That’s another paradigm we are shifting.

Interviewed by Poorwa Godbole on December 15, 2020

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