Two words, ludicrous safety. For patients that meant something different than for employees. For us, it meant keeping them happy, healthy, and at home. So, our patients are older, they have multiple, complex chronic conditions, and this was a virus that really attacks them, right? And so, we initially were trying to keep them home and safe in those early stages. In a very short amount of time, I think it was something like 10 days, we went from essentially 90% in-person visits to almost a hundred percent virtual visits. And then what we did after that was, we prioritized our sickest patients, picked them up in a safe way, and then brought them into our centers that were also practicing the concept of ludicrous safety and then brought them home.

The other thing that we had to do is we had to meet our patients where the need existed. Let me tell you what I meant by that. Early on in the pandemic, when folks were really panicking, and there was a lot of fear and people were starting to sort of stockpile things, we noticed that a lot of our seniors were going out trying to get supplies, and that was really putting [them] at risk. So, that was a very unique need. So, we empowered our teams to say, no, talk to your patients, help to keep them happy and healthy at home and go out and get them toilet paper, if necessary, right? Go and get and bring them groceries. So, that way you can keep them ludicrously safe. And then we added on top of that, something called “love calls” so we can understand what their needs were.

So, what’s a love call? We have patients that are living alone, that are older, that were isolated, and they were really scared. So, first things first, we wanted to make love calls, to say and give [them] assurances and say, “Hey, we’re here for you.” We have not shut down. We’re here to support you, not just clinically. We’re here to support you for whatever your needs are. And then, of course, then they would communicate that with us and that empowered our healthy, happy, and at home initiative. And then we, once the vaccine came out, we promoted this award-winning campaign called Vax the Nation. It was fun. We had t-shirts made, hats made, sent it out to all of our patients. Now let’s pivot to employees, right? So, workforce management was really important.

And especially during COVID, you would win or lose by how your employees, how well you took care of them. So, we were also ludicrously safe for employees. First, of course, like everybody else, we went through, we sent people for remote work where it was possible. We had plenty of PPE, and we created very stringent guidelines to stop the spread of the virus. We added additional second PTO days to help employees address their new elder and childcare issues. And then we were in constant communication to update employees about that. There was a time where I was doing video chats and video conversations three times a week. So, I was sending them out through our chat system to say, hey, let me do a quick five minute. So, you know what’s happening at its earliest stages. At the later stages, when the vaccine came out, actually we were one of the first companies to mandate the vaccine, and our turnover rate was exquisitely low. That sort of combined our overall approach.

COVID made the case for more risk-based, value-based care. Given my very rough relationship with COVID, it’s hard for me to say this, but it’s like, thank you, COVID, for speeding up the timeline on how healthcare’s move away from fee-for-service should occur and towards full-risk, value-based care. It made it more relevant and more important. Fee-for-service, of course, would’ve eventually collapsed or would eventually collapse under its own weight anyway, because it doesn’t work. And a system that thrives on billing for sick care in rewarding maximization of elective procedures, it’s not sustainable. But look what happened when people stopped going to the doctor and hospitals canceled the elective procedures. You had all these medical practices and hospitals hemorrhaging money, and people understood that fee-for-service primary care groups simply couldn’t survive this financial crisis.

But on the other hand, groups like ours, risk-based value-based care models not only can survive during these types of crises, but it thrived during this crisis as an organization. And in addition, our patients thrived. In a risk-based model, doctors eliminate need. Because they’re moving upstream, they’re more proactive, they’re not reactive. And so, our ChenMed focus on wellness and prevention decreases the need for those downstream events. And then providers are then rewarded for taking care of and being accountable for these outcomes and for patients that thrived during the COVID era.

Health equity initiatives are worthless if people can’t get to the doctor. I know it sounds very basic, but that’s important. The biggest challenge to fee-for-service providers is they only want to build facilities where people can afford care, right? And so, this approach creates huge health equity issues. We do something very different. ChenMed goes directly into communities that fee-for-service organizations are abandoning. Essentially, ChenMed brings light to the darkness. And in this process, we transform lives and communities, and we can drive better health. And we’re growing very rapidly because we’re seeing demand increase, right? Just think about where people are building healthcare access and increasing healthcare access and building facilities. So, currently today we have about a hundred centers in about 13 states. But we have a pretty aggressive growth plan to add hundreds more centers over the next few years. The second biggest challenge is what we call the socioeconomic barriers to good health. This includes housing, food insecurities, lack of transportation, and health literacy issues.

ChenMed believes, that 70% of healthcare is based on lifestyle choices. Obviously as a heart doctor, that number is greater than 70.

Almost half of cancers are due to lifestyles and behaviors. The beautiful thing about the full-risk, value-based care model is that it allows us to keep our panel sizes pretty small. So, our doctors, our primary care doctors, take care of about 450 patients. If you look at what the normal primary care doctor to patient ratio is in America, it’s somewhere between 2,300 to 2,500 to one. In our neighborhoods, it’s probably over 3,000 to one. But when you have smaller panel sizes, it means that we can spend, or at least according to data that we do spend, ten times more time with patients than your typical fee-for-service doctor. And that doesn’t mean per visit. That means more visits, right? It means that we get to know our patients a lot more, we get to build trust. And when you build trust, you use that trust to influence behaviors, and you can coach them to get to better health and to avoid costly hospitalizations.

If you’re trying to change behaviors, you can’t do that without building that relationship. And it requires time and repetition to build that relationship, to earn that trust. Our model also allows us, the ChenMed model, the flexibility to transport patients to appointments and then home, if they don’t have transportation, or social workers, they can help patients identify social needs or social services needs for food and housing. We have examples where we’re helping our patients find safe housing. A lot of our patients don’t even have safe housing because there’s a drug dealer in the house. Seriously, these are real issues here. And so, we can be creative and solve those needs and pay for the ability to solve those unique needs. Our educational programs, cooking classes, Tai Chi classes for people at risk for falling and have Parkinson’s disease. We can teach [them] about how to exercise, the importance of vaccinations. Those are all things that we can do in our full-risk model. And that are a part of our normal model.

The global full-risk capitated model is best suited for promoting health equity. Global risk gives you the resources to build the prevention system and the dollars from the entire premium, they can be reallocated to create a system that’s robust, that can prevent these expensive downstream, acute events. We talked about before that you don’t always, it’s not a one size fits all. You’re talking about a highly complex situation, and you got to figure out how to create the right interventions at the right time for the right patients. And so, you, that premium dollar next risk must be two-sided. Capitation only works when the potential for savings is balanced with the healthy respect for the losses. You got to do it. The data supports that, right? When it’s all only upside, why do people need to change? So, you’re trying to a force change. So yes, our model is about changing behaviors of patients, but the people that you need to help change the behavior of patients need to have their behaviors changed. And they’re only going to change their behaviors if there’s upside and there’s potential downside. The other thing, too, is that two-sided risk also allows doctors to lean into patient care, focus on prevention, and manage health issues with an eye towards the long term.

And the wellbeing of the patients. So, it’s a different way of thinking. Fee-for-service is right here, right now. I pull a lever. I get paid.

When you’re at global risk upside and downside, you’re like I’m going to pull a lot of levers, and all that’s going to come together, and it’s either going to create a great outcome or not a great outcome. And I’m on the hook for both. That’s where you want to be. Also, risk has to be adjusted to avoid cherry picking and avoid the massive disparities in health outcomes by race and ethnicity. You know, you can’t pay doctors the same to treat populations that have, that need more services, more access that take more resources to manage and expect improvements in health. The more complex, and it’s not just sickness and clinical issues, the more complex the situation is, the harder it is to get an anticipated outcome. And if you don’t adjust for them properly, you’re going to get a lot of cherry picking.

I can tell you, for example, a patient with poorly controlled diabetes that lives alone or lives in a particular neighborhood, or that has health literacy issues or has food insecurity, is far more complex and more difficult to manage and you get far different outcomes than in a patient who doesn’t have those issues. And so, you have to be careful when you’re designing a system that you don’t incentivize doctors to try to get rid of, out of their practice, the ones who really need the care. Because there’s great complexity and they need an amazing advanced primary care doctor to go and help solve their issues.

On one hand, the technologic capabilities of AI, machine learning, virtual care, home care, and improvement in diagnostic tools. They’re just amazing, and they’re getting better. And I believe there’s going to be an exponential improvement in all of the things I just mentioned. And also, the flow of disruptive companies trying to change things is truly fantastic. We’re seeing just a plethora of what I call ChenMed emulators. Like they see what we’ve been able to do, and they’re like, we want to give it a shot at that. And we think that’s wonderful, actually. You’re like Chris, you’re excited about additional competition? Yes!

Because we haven’t even penetrated a percent of the needy population. So, you need hundreds, thousands, more ChenMeds, if you will, out there. That’s going to really help to transform care. And I also think there’s been an increase, a positive push to move away from fee-for-service. Even in original Medicare with the promising new ACO Reach programs. They can really continue to drive transformation and how doctors approach care. However, and this is the sobering fact here, there are about 4 trillion reasons on an annual basis to prevent change. And those 4 trillion reasons, of course, that’s the amount of money spent on healthcare, right? That’s roughly a fifth of the U.S. GDP has that much reason to stop change. You know, talk of disruption in healthcare is just decades old. I remember going to medical school decades, a couple decades ago or now more, and hearing that what we have here in this fee-for-service model, it’s not sustainable, and I’m hearing the same thing.

But the incumbents that are now getting bigger and more powerful and more consolidated and tend to be the largest employer or one or two of the largest employers in every single city in America today, you know, has a lot riding on the ability to maintain the status quo, so that’s gonna be the tension, right? And it’s not bad people. They’re just, the system is built in that way. And so, most likely we’ll see very uneven change by market, by stage. We’ve been watching what I, what we, call the moral imperative to change take, hold onto different people at different stages. And by people, I mean, leaders who are leaders in healthcare at different stages, right? And so, some people and populations I believe, in the future, will get care that looks very different. Like our patients that are ChenMed patients. They’re going to get care that’s radically different and get great results. And then they’re gonna be patients in a lot of these neighborhoods where I actually think there will be no change, or it’ll get worse. We believe that health disparities will increase with this change. Workforce labor costs going up. We think it’s gonna accelerate the separation between building more access and more care in higher income populations with a better payer and increase abandonment in lower income areas. So, our organization, ChenMed, is getting ready for the increased demand. So, that way we can bring light and better health to more and more neighborhoods. Sort of tie this all together.

My hope is that better and more innovative, higher value care can be accessed by more and more people without means than historically the underserved population has access to. And we’re excited about that. We’re being welcomed in ways by these communities that are just really encouraging and really inspiring, just to even us. And that’s what ChenMed is working tirelessly to do, to ensure we wanna bring the very best to those who need it the most. We’re gonna bring concierge medicine on steroids. VIP care. That’s what we call it. To some of the most underserved people. And we have this amazing opportunity to drive purpose, to transform care, to unlock creativity in the neighborhoods that need innovation and creativity every day. And we’re really excited about that. And lastly, if everyone becomes the change we want to see, and if people are committed to the LAN vision and continue to press on, despite the barriers, the incumbents, and they can push through and stay very steady, we can disrupt the status quo collectively and bring at scale what we at ChenMed get to see every day in the communities that we serve.