Of all the new entrants described as “disrupting” primary care, one that has made some significant inroads is Miami-based ChenMed, which has grown to more than 100 clinics in 15 states. The privately owned company’s centers are located in underserved neighborhoods, where lack of access to high-quality primary care and other social determinants have negatively impacted longevity. In a recent interview with Healthcare Innovation, Gordon Chen, M.D., the company’s chief medical officer, spoke about how the company is trying to “flip healthcare on its head.”
ChenMed was founded after a serious medical issue in the family. In 2003, Jen-Ling James Chen, M.D., Chen Medical founder, was diagnosed with cancer and given two months to live. As the company’s website states, he and his family experienced firsthand the frustrations of navigating the healthcare system where profits, not patients, are the focus. After his recovery, Dr. Chen was determined to revolutionize the healthcare delivery system. He created ChenMed to provide accountable, compassionate, and coordinated physician-led, family-oriented primary care. Gordon Chen is the company’s chief medical officer and his brother, Christopher Chen, M.D., is the CEO.
Healthcare Innovation: Can you describe ChenMed’s business model? I've seen it described as concierge medicine, which I think is typically linked in people's minds with patients who are well off financially and who pay more for high-touch care. But ChenMed works with underserved populations. How does the payment model work? Is it through Medicare Advantage plans or value-based care contracts with insurers?
Gordon Chen, M.D.: We are a full-risk model in Medicare Advantage. What that means is that all of the aspects of patient care or what contributes to medical costs, we pay for. We're taking a completely fresh look at medicine if we're paying for all of it. The stuff that helps our patients to live longer and live better, we're going to invest in, so more primary care, more access to their doctor. If they need transportation or medications on site, or if they need to text their doctor and have their doctor’s cell phone number and that helps them to live longer and better and avoid hospitalizations, we're going to do that.
Many seniors have only 10 minutes of access with a doctor, maybe once or twice a year. That is the current existing model. How are you going to influence patients to better health with 10 minutes twice a year? You can't. Those doctors are set up for failure. If you think about what healthcare needs to be, it's about behavior change, it’s about relationship and influence and trust, right? It's not about just writing more and more prescriptions, because the right answer may be getting you off some of those medications and getting you on the right path in terms of lifestyle or diet. Essentially, we're trying to flip healthcare on its head, and say, let's just start over. Forget the existing model. If we could invest in the right places, where would we invest? And we ended up paying for the model and our growth is because our outcomes are better.
HCI: Recently you announced your 100th primary care center, and now you're in 15 states. Has that growth been gradual or was there a long ramp-up period when you were getting the model right, and then it took off?
Chen: We would push forward with adding new centers, and then we would pause, figure out what we needed to change and then we would push forward with growth again. Now we're at the point where we're growing 30 to 40 percent per year, and we're into what we're calling hyper-growth phase. The intent is to scale as aggressively as we can. If you have a model that can literally help patients live five years longer, cut hospitalizations 30 to 50 percent, and reduce suffering, if we're not pushing ourselves to the limits of how quickly we can get this model out, then, we're not helping people that we can help right now, right? It's almost like if you have a vaccine that can save lives, and you're not pushing yourself to the limit to produce that vaccine, then you're doing society a disservice.
We have this proven model. We empower PCPs and care teams to be successful. You pour the training into them; you give them the tools and the technology, and you connect great PCPs with the neediest patients. When you do that, there's this mindset of accountability for outcomes, not volume. The doctors want their patients to have better outcomes; they want deeper relationships with their patients; they want to connect with more of them, and they're empowered to do that.
HCI: Is there an underlying technology platform for this more personalized care —making it easier for patients to do things online or contact clinicians or making things easier for the clinicians as well?
Chen: We have our own technology company and EHR. It's called Curity. It is not only an EHR and practice management tool, but data management system. You can't practice in a full-risk model unless you have incredible data and analytics capabilities. If you are responsible for all of the cost of healthcare, you cannot fly blind. You don't want to get in a situation where you're trying to drive for value, but you have no idea how much value you're getting. If one hospital has a $30,000 bill and another hospital a $50,000 bill, what are you getting for that $20,000 price difference?
HCI: Because unlike traditional providers, you guys are on the hook for that $20,000, right?
Chen: Exactly. We're on the hook for that. And oftentimes in healthcare — it's the strangest thing — you pay more for worse quality. What happens is with consolidation, there are fewer options, there are fewer competitive market forces, and that drives prices up and quality down. This is why it's hard for other PCP groups to transition fully into value. Because value is something where if you're taking stepwise approaches, you'll get there in 30 years. In order to really make a splash, you have to go after the most expensive parts of healthcare, which are the preventable hospitalizations. Heart failure is the No. 1 reason why seniors get admitted, and almost all heart failure admissions are preventable. Is that crazy? And it's $15,000 every time they get admitted. We are asking how we can make heart failure admissions a never event. You can do that through the relationship, the frequency, the access to patients. That is a huge lift for us to then reinvest back into primary care. We're investing five to 10 times more into care than any other primary care practice. That's how you get a doctor-to- patient ratio of 400 or 450 to one versus 2,300 or 3,000 to one. We are investing more in the doctor-to-patient ratio and supporting them with technology. We are taking all of the savings from unnecessary hospitalizations and investing upstream into primary care.
HCI: Could your model work outside of Medicare Advantage? Would it work in Medicaid managed care or with commercial insurance for younger patients as well?
Chen: The concepts of the model — more access to a physician that's aligned to your health outcomes —can work for any patient population, because everyone wants affordable VIP care that delivers better health. Our mission is focused on seniors, because we believe they're the most vulnerable; they have the largest kind of burden of disease that is driving the majority of our healthcare costs. We believe that that's where you start. There are more seniors than we can provide care for, so why would we dilute our focus to other populations that maybe aren't in as much need as seniors? We have tried to stay very disciplined in our focus on seniors. Now, 40 percent of our patients are Medicare and Medicaid, so it works in Medicaid environments.
HCI: What does ChenMed look for when recruiting physicians into its practices?
Chen: The only thing that we require from prospective physicians and clinicians who want to join ChenMed is that they align to our vision, mission and values. Do they have a burning desire in their heart to change and transform American healthcare for the neediest population? Does our mission resonate?
