Dr. David Berg is the co-founder and president of Redirect Health, which aims to bridge transformative quality affordable healthcare to small and mid-sized companies. He’s also got a lot of meaningful accolades under his belt from winning the Phoenix Business Journal 2017 Health Care Innovator Award to being one of the finalists for the 2018 World Health Care Congress in Washington DC. Beyond all of that though, he’s known for his burning passion for excellence when it comes to customer service and taking great care of his employees.
Healthcare is one of the most important industries there is. Unfortunately, its traditional models and systems have failed us in so many ways because of how processes are being mishandled. Thankfully, there are a few, like my guest for today Dr. David Berg, who’s passionate about transforming the approach. Listen in as we talk about building a gold standard for customer service through the lens of healthcare.
8:50 David talks about how his brand of healthcare targets a small entrepreneurs’ typical restraints
23:42 Creating a transformative mental model of healthcare
33:04 Guiding patients through the system to eliminate unnecessary activity
43:26 Managing technology to get the information to the right person
48:18 David talks about the challenges of telemedicine
52:33 Always start with the consumer
57:45 David’s passionate plea to entrepreneurs
“Care more, love more, and risk more.”
GET IN TOUCH:
MARK LEARY:
www.linkedin.com/in/markhleary
www.leary.cc
DR. DAVID BERG
https://www.linkedin.com/in/daveruel/
https://www.effic.co
Wednesday, April 7, 2021
SUMMARY KEYWORDS
people, healthcare, doctor, system, thinking, customer service, business, money, employees, health care, care, small business, transforming, mental model, started, built, knowledge, traditional, create, customer
SPEAKERS
Mark Leary, Dave Berg, VO
Mark Leary 00:00
So we're rolling, cool. We are live. This is you're doing it wrong with Mark Henderson Leary with me, Marty. And I have a passion that you should feel in control of your life. And so what I do is I help you get control of your business. And part of how I do that is by letting you listen in on a conversation between two people who have a passion for excellence in the entrepreneurial world in some way. And they're talking about a subject that you already know something about. But this time, we're digging into the nuts and bolts and getting our hands really dirty. So you can start to understand in a different way, the things that are holding you back, and you can unlock those those challenges, and break the ceiling and get what you want, from your business and ultimately from your life. And so before we get into the conversation today, I want to remind you please share this content with those people who can take advantage of it and who might find it valuable because in the hands of no one it does no one any good. So do the liking, sharing and give us the feedback, we got to have the feedback, all the feedback you've given us so far, so helpful, positive and negative. We love all forms of feedback. So let's get into it. Let's talk to our guests today. David Berg is the head of the founder and president of redirect health, a company that is as a unique approach to healthcare in a time when I think health care needs some really important, unique approaches, because the health care system up until now has really failed us in so many ways. And it's failing us in a bigger way. But Dave has a passion for excellence in customer service into transformation and really taking care of employees as well as patients. And so I'm really too hot, really eager to talk to Dave about his approach to process and customer service and all the things in the business to transform healthcare in the world in so many ways. So welcome, Dave, how are you, sir? Hey, Mark, I am doing fantastic. Thank you. Well, I'm glad to have you here. So this idea of transforming healthcare, and to me that means it means a lot of things or leads means costs, in that the craziness behind that. But to me, a consumer driven approach, you know, as a patient, healthcare has never really done that it's a doctor centric, at best, or in probably at worst, insurance centric. How are you transforming the industry?
Dave Berg 02:20
You know, I get this question a lot. And it always seems a little disingenuous of me to say I'm transforming the industry. When I when I know the truth about how it started, I have a business and it happened to be a health care business. And I could not make the traditional health care system, the insurance based system work for my own company. So I was struggling to be attractive as an employer, to my employees and take care of them. And to really understand all the challenges they were having around health care in the traditional system was letting me down and I'm in the system. So I just built a solution for myself, I had no intention ever to transform an industry or to even sell it, or even to offer to my friends. When I did it. I just saw I just solving a business problem. And it started with me owning a business and not liking it when my competitors would poach my employees that I trained up really well. And when I hired great people and got the end and who had great potential on the night, train them and they got even more potential and were used where they were utilizing their potential and then they'd go take a job with a big corporation or a hospital system or, or Honeywell was taking a lot of my people at the time American Express. And the main reason they could take them was because I was in the traditional health insurance system for our benefits, meaning that the deductibles were going out back then in 2007, when I'm talking about the deductibles are going from $500 to 1000 to 1500. Now there's 5000 $6,000. And nobody could afford them. And if the competitor or non competitor, he or another company had $500 deductibles. Now their health care plans we use mine couldn't. So I didn't set it to transform anything except my own business. My own interest now was your business and health care. That's what I thought. So you're in the healthcare business, and you're losing people because you can't provide good health care. That's got to wake you up. But you look in the mirror like what's going on here. compounded is I just moved from Canada, in which is a different health care system. So I'm thinking I'm the only dummy in the country, I can't figure this American Health Care System out. And nothing made sense to me and I had all kinds of wrong perceptions of what was happening and why the system exists in the first place. Bottom line, though, it didn't matter because I just created my own system with a purpose that was very specific to my company and our people and our families and what we needed and that had to fit with the constraints that we had around money and time and and what we wanted and so there's I really built this out of sheer need because I could not fit into the traditional system. As a Canadian physician coming here with my Who's a who's a family physician, and we couldn't figure out the American healthcare system. It just didn't make sense to us. It makes sense to us now, but at time it didn't. So we our only solution that we could come up with was, let's build our own for our own purpose. And it ended up working so well, that our we started putting in our, I was still part of eo but back then was called Why do young entrepreneurs organization, we had the dump the why my generation was part of jumping the why dump?
Mark Leary 05:29
I wouldn't be in right now. I wouldn't be in it. I actually, remember, I'm actually an alliance partner. But yeah, so I wouldn't, I would not be eligible either. So
Dave Berg 05:36
yeah. So when I when I just a little tangent, I was 36, when I joined. Why, yo, just 20 years ago, 21 years ago, and that was the last year you could get in was 36. So I just made it onto the wire at that time, you had an age 40. So I'm easily 16 years, 17 years beyond the kickout date. So I was part of that generation. So we're not leaving, and we changed it. But I started helping a bunch of my friends who had businesses, probably a dozen, maybe 15, when the recession hit in 2008, nine, and 10. And I just did it to help them and it worked really, really well. So we were transforming their healthcare experience, too. But it was more as a part of my, my peer group that and I was a cool kid on the block as far as healthcare anyway, because I was saving them 10s of 1000s, hundreds of 1000s of dollars, it was some key principles that we had already built in our system. And then fast forward, now we're in all 50 states, you know, 10s of 1000s of people that we help right now, and it is transforming healthcare, the lives of those people, I don't know what it's doing for the country, or for a city or but for those companies, it is 100% transformed their experience with health care. And I love doing it. And but it was never the intent
Mark Leary 06:51
to make a tangible kind of what the transformation looks like. So somebody who's listening, well, actually taking a step back, I interviewed a guy, Mike Morris, he runs a very successful law firm, very high growth in Michigan. And what was so important about the conversation with him is it helped people who, well, as a law firm, it's very difficult to transfer to think of yourself as a business, oftentimes, they think of themselves as these practitioners. And so he was like, no, it's a business every all the business rules apply. You just if you if you take it seriously and do it, you can scale the business really well. And so where I think that I want this contrast to come out on this conversation is healthcare, I think struggles to think of itself as any form of customer service. It's like, you know, we're there's something very traditional about like, there's, we're, why don't always know why you would describe it as so it's almost art like, and it's like, no, it's a business, and the people who are complaining about health care, not making money for them are people who are holding on to the old ways of doing things. And this, if so, I'm singing from a perspective of any business, who says we can't do business things will go, look, look at Mike Morris, he's doing it, you can do it. If we can't be customer service, like, okay, no talk to Dave, like he's transforming an industry that's customer service oriented, he can do it, you can do it too. So the transformation of the old way of healthcare being sort of the fee for service type of approach, like it's very reactive, everybody loves to talk about it, sickness care, you know, waiting for things to break, you're in a more proactive membership model that people sign up for and can consume. It's sort of not quite all you can eat, but all you can eat within certain types of services you provide, that ends up saving tons of money. Is that a fair sort of statement to talk about how the model is different if you can?
Dave Berg 08:35
It's all uni d? I'd say that Yeah. Right. So it's not more it's not less, and it's not wasteful. And
Mark Leary 08:43
to think about is that concierge medicine is not concierge medicine. This is a premium product type of luxury thing. This is a
Dave Berg 08:50
it's an it's an end to end system. And in health care system that's designed specifically remember for me, so small businesses, and our employees and our families, with all the constraints that we have, knowing that easily 80 90% of small business employees make under $25 an hour, most of them make around $15 an hour, well, way over half will make $15 an hour or less. So those are the constraints we got to deal with. There's no extra money for rent. At the end of the month, there's no extra money for food, or transportation or car payments, or fun things even go to a movie is tough for the majority of small business workers. So let's recognize those constraints and build our system. So it takes care of those constraints. So the last thing we need in there is is things that are not needed. Oh, right. doctors need it. Maybe the hospitals need it. Maybe the insurance companies need it. Maybe some other vendor and healthcare needs it. But we don't need it. So
Mark Leary 09:45
we got to the heart of my of my question, because it's one thing to envision a transformation and having been in a part of an IT services transformation from a fee for services, our $4 to a proactive solution. It was like oh, visualizing, it was not the hard part. Transitioning and managing costs and new metrics and measurables. And price all the processes that went with that was devastatingly difficult and expensive to figure out.
Dave Berg 10:08
And it would have been hard. If I was building it for somebody else, it would have been really hard, just like you're saying, but it's different. This is why I somewhat, I didn't start by trying to transform anybody's experience on my own. And that's a lot easier. If I'm trying to transform yours, you're gonna change your idea from your your mind, time to time, and you don't even know what you want. Well, I had a really clear idea what I wanted for myself, I didn't have to ask anybody except myself. And I had many of those conversations with myself about what I want. And I changed my mind, a lot of what I want is I learned more. But but so we designed something for small businesses and our employees with all the traits that I was facing in my business at that time, we have 54 people, I think we're probably about 250 people now. But we're still small business and a lot of small bits, all the small business principles and constraints apply. And so we designed a complete end to end system because there was no point solution that we could plug into the traditional system that would make the traditional system work. Because the mental model, the traditional system was different than our mental model. We started with the mental model that this system had to serve us. And we didn't care. We didn't even give a lick about anybody else's share price. Yeah, I didn't care how BlueCross data united did or Cigna did or the hospital system did I care about our company and our people. So the mental model was everything we did had to serve us, that's totally different than when you plug into somebody else's system. They're there to serve shareholders and other things. So we went out of we started with a different mental model. And, and we built the structure around that the rules and the structure and the principles were all around that mental model that we had to be served. And it just so happened that other public companies first my aura, small companies, not public companies, for sure, but small companies, like my own, had the same interest that I had, if they didn't, I still would have built what I built exactly what I built it. But it just so happened that small businesses had the same interest, the same needs. So we started building the structure around it, and creating the the cadences and patterns and around customer service, etc, that that that we wanted. And what's interesting, and so that's how we got where we got, we just built a we took a complex system wasn't working for us wasn't designed for us called healthcare, and with insurance is the base of it. And we just created another complex system, but it was less complex, and we knew how to operate it, and manage it because it was ours. And it was there to serve us. And what's interesting is customer service, a big part of it. But what was also interesting me is the reason I got in trouble the first place is because of customer service, because I tried to apply customer service business principles to health care. And it worked really well at first really well in the insurance model. But it was a critical error that forced me to make the this transformation for our own company. And I've been part of the Strategic Coach Dan Sullivan now for 20 years also. So he's a big part of me understanding how to run a healthcare business, like a real business. And I had to stop being a doctor to do that. By the way, it's really hard to run a business as a doctor or a lawyer, engineer, f accountant, a professional. It's just because we care so much about our professions, we have to like, chop that off and just we're going to be business people right now care about our customer and our employees and our mission and our purpose, who cares about our profession, right? So that was a little hard. I don't wanna say yet. Like, I don't care. But it's not at the top of list. It's not even third on the list. It's not even 10th on the list. Wow matters.
Mark Leary 13:37
I because I have people in my world that are exactly in that spot. We've got, I got you know, surgeons in our world trying to build a target practice.
Dave Berg 13:45
It's hard. I don't know how they do it. I mean, it's just I started out wanting to be an engineer. And so it's a little easier from that perspective. I got tricked by a pretty girl to go into pre med courses. And in my three weeks in the University of Toronto, we're married today are now since 19. We met in 1983. She tricked me into switching all my courses over to hers. She told me there's no way I was going to pass those courses. They're too hard for me. I wasn't smart enough. I believed her because she smiled nice and gave me a lot of attention. So she's a family physician, and I haven't practices 2001 base practices chiropractor. And I've never really wanted to be in healthcare. I mean, I don't want it. I loved engineering. I love solving problems. I love building things. And so my wife at the time I just said, I made up this thing that I made the system that works so I could have an excuse to build a new system that would work. Now, it works. Ours works really well. And the old system is working less and less and less and less well, at least for the users of health care for the shareholders to healthcare, it working great. You've never seen higher share prices in the history of healthcare. And there's never been a more successful industry than the last 10 years in history in health care. If you look at health care It means that the rise in share price is higher in healthcare than American healthcare than any other industry in the world. So it's been highly successful, that this complex system we call American healthcare for that purpose, it has not been successful from a perspective of small business companies and the users of families. So but here's where I got in trouble with customer service. And so I built our initial model, and we add margins are probably four or five times over normal, based on customer service, I get rid of no glass windows. No, we answered the phone up front, I had customer parking up front. And so the best parking spots always went to a customer we had we did training where we wanted to make eye contact and you know, smile with your eyes, within a millisecond, even if you're talking to someone else, we really went into the customer service thing. So I attract a lot of people who were just had great, like a great heart for customer service and serving people in creating great wow stories. And Matter of fact, that's our number one job of everybody in our company still today, which was 20 years ago, which was inspire others to tell their redirect your story. That's how we were called something different but, but inspire others, and I don't care if that means you're commenting on their new purse or their shoes or, or you know, you're just happy to see him just make them tell a story and get them in the right mindset. So we really double down on that concept. And it led to huge profitability for us and the Strategic Coach, principals were a huge part of that. And the customer service combined with that, we're just we're doing things nobody else was even thinking of were believing in health care. And every time I got a visit from other people on health care, they always left a little bit disillusioned because they realized that they could not they couldn't even change the parking, right. They they have a hospital system is there. It's a doctor parking, the best parking had to be for doctors. I said, No, it's for our customers, doctors, you park anywhere you want. You parked next to me the back of the lot, or the first available spot that's available that doesn't say customer parking on it. And so a lot of times the healthcare folks are disillusioned by that customer service. But here's how it got me in trouble in about 2006. before the recession, before I had to make this shift in 2007 was my thinking year 2008 was my implementation year the first time. But 2006 was the kitten getting kicked in the ass year, and I was getting kicked hard. And my profits went from four or five times normal to right around normal, maybe a little less than normal. But because of this, because the labor market tightened. There were jobs all over the place, the economy was booming, everybody was growing. People wanted my employees. And at the same time, and I did not understand I think I understood how valuable how much I relied on a great customer experience and people who could deliver and people had a hard for delivering before I even hired them. And then I could train it like to 10 that's what they came in with, I could really tap into their customer service potential. But the part I didn't anticipate with was health insurance costs going up so much. So when health insurance costs went up, we were all small businesses were faced with, you know, 20 30% increase if you wanted a $500 deductible still. But if you raise the deductible, double that to 1000, then you can get a 15% increase. And then the next year was 25%. Again, 23%. Or you can take a 15 $100 deductible. So as those deductibles are going up because the insurance costs were going up my employees now because they were so good. They had to leave sometimes left in tears because they didn't want to, but they want to start a family or they got married and their new wife was insisting they had health care they could afford. And so they'd go work for a bigger company. And there were so many of my boys could get a job. Like we taught them how to do it. We taught them how to how to just impress people at the front counter. But that would also apply to a recruiter also. Yeah, so we just we were losing our best employees because we couldn't afford their health care and they needed health care. But it's an our company dependent, so much all our process and our systems and our success was dependent on this customer service. So when I lost the ability to win when I when people were leaving, I had nothing no hook to hire them with, to be have a recruiting advantage in a very tight labor market. I had no competitive advantage in a labor market that was tight. I did not even thought of it before. So that's why I had to create this. I had to get rid of the CO pays and deductibles and to create a new system that could compete with the bigger companies insurance system. And it was remarkably easy now that I look back on it though it probably took me about seven eight months of on paper and whiteboards and talking to people and learning to learn what I needed to learn in order to build to engineer essentially this new system that would allow me to take care of Are people in a way that was so believable that they would never want to work for a big company, even if they could, and then I went, I turned it into a sport where I wanted to make it so that even if they offered them $1 more an hour or $2 more an hour, they'd never leave, because the healthcare was so believably meaningfully accessible and usable to them. But it's that's how it started. But the customer service aspect of our business and how much we relied on it for the profitability we had. That's what got in the way, because I did not understand that when that tight when that combined with a tight labor market and rising insurance costs that went through the roof for small businesses in that 2006 year, it was decimating my business, then, you know, to the point where I gave myself till 2010 to get out of the industry. Wow, okay, yeah, I was not interested in American healthcare in in 2006, I was no longer interested in American healthcare. I'd been here since 1995, at the time from Canada, and, and I was just like, I was really, I was getting my ass kicked that year in 2006. And I was looking for a way out. But then as we discovered how to take care of our people, and how to collaborate with them and team up together, I saw how much power we had over the industry when we work together. And the industry today separates the employer from the employee. So the purchaser from the user, and that's the power, they have huge power. But if you separate the purchaser and user, it's different. It's just mean think about, you go to an airport, and you buy a bottle water like this, and it cost four bucks, and then you hit the security line, you're going to throw it away half empty, if you bought it, no, you're going to drink it, even if you're even if you're not thirsty. But I guarantee you that if I buy that, if I buy that for your kid, or my kid, and they don't buy it, they're the user, but I'm the purchaser, they're not thirsty, throw away half that bottle. Yeah. And I see that in my conference rooms, too. If I'm putting in a bottle of water out there, there's there's some that are drank this much, not mine, it's always drank that much, even if I don't want it as a purchaser in the user. So we just started
Mark Leary 22:04
playing with those that have that problem and sound like in healthcare, there's actually three, there's three factors in other businesses similar, you've got you get where the money comes from, which is insurance, you've got a, I think, the first learns with the home health care model. So you've got home health care product to take care of somebody in their home and have them cared for with difficult conditions. You've got a doctor who refers them in and you've got an insurance company who pays and so that you have to understand all three factors, the insurance is going to pay you the doctor is going to get you the business and the person you're trying to take care of is that person in the home. And so that complexity has to be really unwound.
Dave Berg 22:42
Yes, you know, there's something that I discovered and those are I've just, I've learned so much about health American health care when I was trying to build my own system in 2007. But one of the analogies I use that never endeared me to my own profession, was that if you really think about it, the the doctors are like miners, and the people are the the the raw material, but what we're mining is, is codes out of those people. And then the insurance companies are the like the owner of the mine. So it really is insurance companies own the mind that they're inside that mine are what are called CPT codes. But you need doctors workers to get it out of patients, and then them and hopefully the doctor can extract the codes for less money than they get, then they get reimbursed
Mark Leary 23:31
and the high value codes Oh, you know, valuable than oh my gosh, exactly. So you've got a major condition that's very valuable. I found something very expensively wrong
Dave Berg 23:42
with you. Yes. That insurance model is filled with great people like very caring, considerate people. So it's not about the people. It but the system is a bad system for the people. It's a great system for shareholders. Absolutely brilliant, so smart. It has been smart, it will be smart for years to come. And we start seeing Medicare Advantage for all the insurance companies in the middle of it now they get paid by taxpayer dollars. Mark my words, that is that was crafted 20 years ago. It's been going on it's going to happen. There's no way it stops. The train has been moving, but it won't serve users, purchasers and users, especially not small businesses. So it requires a new system. And that's what that's what our system does. And that's how we think about it is this create a new system just for that group. We're not trying to serve large corporations or government entities or university systems. Maybe a small municipality could fit in because they operate like a small business or an association we have quite a we have several Association realtors, right so but they're they're entrepreneurial organizations that realize that the existing system is not really going to serve their folks. And if there's a lot of money going into it subsidization, you can make the other system work a little better for the purchaser and users But for the most part he can't. And the way I see it is the doctors are really the middlemen. There, there's the the miners that are there to extract the codes. And the more we can keep the employer, the purchaser separated from the user, their employees and their families, the less power they have, and how do we do that with insurance companies go to the through the brokers go to the the employers and go, let give us your trust, we'll protect you from your employees will protect you from the doctors from the hospitals and the drug companies who are trying to convince your people who don't appreciate the health care buying, for me anyway, that we're trying to convince them they need more health care. But then what do doctors do? Right, we are drug companies, we go to the to the user, the employee, we go, Hey, give us your trust, don't trust your employer consumption, don't trust your employer, don't trust the insurance company. Give us your trust? Well, what I learned in 2007, when I really dove into that, is that the power is when those two units come together and start trusting each other when the employer and the employee start working together. The insurance companies, the brokers, the hospitals, the pharmacy benefit managers, the drug companies, they lose their power. And that's the, that's the easy part about this is now now that I know better was hard at the time to come to the conclusion. But once I did, it was really easy. Now let's just create mechanisms to help each other and trust each other and collaborate, employer employee and don't let the insurance companies and brokers and hospitals and drug companies and drug commercials get in our heads, we're working together, we're on the same team, everyone else trying to separate us. So that's the mental model. Again, now we built a lot of structure that has a lot of technology and a lot of process around that mental model. But it also supports that mental model that we have to work together. If we want to eliminate unnecessary activity, unnecessary spend, and make this so it works for everyone in the company, not just the 20% who could afford it 50% afford it. But 100% of the people in the company, just like you've got to take care of every one of your family members. You can't say well, this child doesn't earn enough money. So they are left out of your family health care system. Yeah, so I the same thing in a business, small business, not a big corporation, small business, I can't say, Okay, well, of my 250 people, these 30 people, they don't count, they don't matter as much, or these 100 people don't matter as much. And these 100 people matter more, I could, but that's not going to give me the advantages a small business has of caring about our people and acting like a family and the trust that that every small business needs to create in order to be super successful and profitable.
Mark Leary 27:43
So the idea of getting on the same side of the table, I place a lot of similar industries, like my background is managed IT services and which is the idea of like, before it was opposite sides of the table, the more I spend time with you, the more I get to build you, that's great. And the clients and customers were like, well, we would like it if you tried to keep our servers running a little bit better, as opposed to putting in systems that required a lot of maintenance. So we got on this on the same side of the table, absolutely, we're gonna wrap this into a fee, it's equivalent to your approach to a membership model. And we're going to price based on the number of things you've got, and the more efficient we are, the more money we make. And immediately we got destroyed by our total inability to keep the systems running like we thought we, because we didn't know how to insert the right behaviors, we were more incentive to kind of, you know, hope, as opposed to really plan
28:30
to learn
Mark Leary 28:31
a bachelor, we absolutely have a very expensive learning and in the industry 20 years later is pretty smart about it. But it was not as intuitive. We used old metrics and all metrics didn't work utilization, like how busy are your text that was not that was the only metric we had at the time. And the more you got to people busy, you know, you had to actually change your thinking about what are they working on? And how do we have the right people to work on totally different tasks and totally different thinking, standardization, proper systems and those kind of things. So when you get on the same side of the table with your patients and all the patients and customers and I know you're that's your thinking was, let's change the term back to customers, we want these people thinking they're being served. And that makes sense. They're on the same side of the table. How do you start figuring out how to re engineer the flow the process into your term I which I believe is eliminating waste? What what waste you start to eliminate in that process? And what was that like?
Dave Berg 29:24
Yeah, you know, essentially, I actually don't like using the word waste because it okay to apply is a little bit judgmental. So some people if you're in the other side of it, but what I will say is where I want less disagreement, so I'll say eliminate unnecessary activity. Unnecessary spent. It's hard to argue with that, right? The word unnecessary. It's easy to argue, well, that's not really wasteful, because that saved the light that MRI save the life. Well, that MRI, which was $3,000 was unnecessary. What was necessary was an MRI that cost 300 but that MRI that costs 3000 was totally unnecessary, doesn't mean something else wasn't necessary. But it's going with what's needed. And and using the dimension of cost to, in some memorize are better than others. So for certain conditions that better MRI is necessary, but that better ever I never cost $3,000 because 1000
Mark Leary 30:18
Yeah, so how do you change that? That's, that's very sophisticated thinking requires Oh, you have a knowledge of the tool set? I mean, that's a good a really good example. Because when if you put a customer service rep equivalent to your frontline person, they probably on average industry, across industry don't possess that pantheon of knowledge of the library, the lexicon of well, what are the types of MRIs? What are the types of blood pressure medication? What are the types of blood thinners? What are the type? Like there's, there's 10 of each of those. And there's, there's 10,000 categories? How do you wrangle that proactive knowledge into something usable?
Dave Berg 30:56
You know, when we first started doing this in 2008, for our own company, we spent about two years buying into this healthcare consumerism,
Mark Leary 31:03
mental model. And yeah,
Dave Berg 31:05
I gave it up in two years, because I thought as a loser model right there, because the system is the other system is so good. And it's so complex, there's no way you can stay on top of teaching somebody. And I remember I was leaving Chicago at a after meeting with Tim Sullivan. And I was making the comment YouTube was just come around how I'm going to use YouTube videos to improve the make it easier to educate my people to be better healthcare consumers for our own health plan member. We hadn't even thought about commercializing this yet. I'm just doing this for myself. And I made this comment about YouTube. And about that make it easier for me educate. And Dan had said something about Is there any other way you could think about that problem? And I so someone facetiously said, Yeah, I can eliminate the need to educate, then I would need to learn YouTube. And that's all they did. Right? He didn't give me the answer. And then the airplane, right, I couldn't get out of my mind. Like, how would I eliminate the need to educate? And why would I eliminate it? Well, what it was cost me $10 to educate, but it only costs one $2 or $1, to actually do it for them. But I still spend the 10 bucks to educate when I could do it for one or $2. And I just started doing some modeling myself and some little experiments, who knows how scientific they were. But my conclusion was, you know, I can do this for my own employees much more effectively, much more rewardingly with with less cost, I just do it for him. I'm create a small team of experts who know that stuff that report to me that I'm working with, because I had I had that knowledge, my wife is a physician, we had that knowledge. And so if we were just a versus team of it was us then was a team of one more, and two more in three more. Now, I don't know how big that team is, of the experts that have been doing this. It's not more than 20, though. But it's just so we became the ones who are going to be your de facto consumer, we were in charge of the consumerism for your lifetime,
Mark Leary 33:01
as a committee for advocacy. And why don't make decisions for
Dave Berg 33:04
yet what we found what we found for our own employees, no money decisions, right? That's a consumers in part, you'll make decisions about the options and to understand what the costs of those options are, which could be money could be time could be attention, or focus or pain, or whatever the costs are. But we would help people understand what the total package of costs were including money. And then we'd help guide them through the system so that we did we eliminate unnecessary activity and money and spend and stuff like that. So they got we streamlined. So logistics place streamline engineer to logistics play, where we streamline them exactly to where they needed to be with the timing they needed. And it's not always right away, maybe sometimes the best time is next week, because you want to give it a week to see if it just goes away and watch it right. It's called watchful waiting in medicine. It's a real tool that pays zero. So nobody does it anymore really doesn't watch your weight. It doesn't pay, but it's what we're taught. Right, we are taught that the most valuable to on every mom with a medical medical degree, it's the number one tool that she will use with their own family. And what it results in about a 10th as many doctor's visits as the general public, as her own patients, they get every second. Now, watchful waiting is a tool that is not paid for because it does not serve the traditional insurance model. Because the more we do, the more we make, the more that happens, the more insurance you need. The more cost there is, the more people have to buy insurance, the higher the share price, everything's about more in a traditional system, we needed a different system where that benefit is benefits from less. Now, that doesn't mean less of what you need. It means less of what you don't need. And that's an important distinction. And that's where healthcare consumerism falls apart. Because there's no way mark you can really know what you need when you have a pain in your chest or pain in your belly or right blood coming out of your nose, right. There's no way you can know what you need. And if you don't know what you need, you cannot be a great healthcare consumer. You just can't know So, when I, when we learn that and of course, we didn't learn that over a week or a day, and we're even on that airplane back from a meeting with Dan Sullivan. But it stimulated the thinking of what if I could eliminate the need to educate, then I would need you to, I could use you to for other things, and we do today. But the concept there was, let's get let's abandon the thought of healthcare consumerism, because that's the thing that's frustrating me the most right now is I could educate somebody, I could educate you, I could show you the 10 things you could do today. And even with your traditional insurance, you would save a ton of money and a ton of time. But you wouldn't use it right now. Because you're healthy, when you want to use it six months from now you forget it. And then you make a mistake, you make a mistake, and then I'd spend more time fixing your mistake than if I just did it for you. Because there's a cascading, you know, you make a mistake, and then you try to fix it and you make more mistakes, and it cascades into something much bigger than where it would have been if you just did it right the first time. So we today we don't rely on people to do all of that. Today, we've built the systems and the technology and the process and the algorithms to be that to guide us through the pathway where we're naturally going to be better healthcare, we're a better healthcare consumerism will happen without us having to be the the true consumer, the person making the financial choices. And and I personally believe I have a lot of friends that disagree with this statement. I believe that health care consumerism making the healthcare user, especially when they're sick or scared, I have a consumer brain about money is a is a losing proposition. And it's the proposition that the traditional system takes advantage of that this concept of if we can create uncertainty and money and pricing and a creative fear that will make the public need us. That is built into the the share price share prices of all healthcare companies depend on that today. The traditional ones, it depends on that fear, and you thinking you need them. And so all we've done is we've just created a system where we say, Hey, we don't pay get paid any more money. If you spend more. Matter of fact, we have less expense if you stay healthy. And if you are streamlined through the system, and you don't bounce all over the system, because it's expensive for us when you bounce all in our members bounce all over the system and waste time and, and money. And sometimes it's an employer's money, sometimes it's a reinsures, money doesn't really matter, still money being wasted, its time being wasted. And here's the money that I care about a lot that is not talked about in health care. Every time somebody bounces around the system and has to miss an hour work, that gets in my mind that that cost of that hour work that they don't get in their paycheck gets added to the cost of health care for that family. Right. And we forget to include that because we when we talk about 18 90% of GDP, we don't can't account for that last wage for that hour or two hours or or day.
Mark Leary 37:56
So the concept of advocacy and getting the right decision in the hands of the right person, I get that conceptually, what I've struggled with is making that cost effective and making it systematically consistent. But in this basically set, you know the the knowledge management question. So if you go from the smartest doctor in the world is your doctor, that's a manageable model, not scalable, but it's manageable. If you're saying Well, look, we've got 1000s of patients, clients, customers, we've got a team of people that have various expertise. And we've got people on the frontline managing not knowledge and continuum of care is very complex problem. How do you what systems I mean, I can easily imagine the future is artificial intelligence and machine learning. I'm assuming there's not a lot of that in your world just yet. But what are you doing to manage knowledge systemically, so people are on the same page and communicating efficiently? Well,
Dave Berg 38:49
there's a lot of industry knowledge might not be our, and intelligence might not be artificial. It might be real, or it might be industry, intelligence, and judgment. But it does start with data. So there's some similarities in the process. So think about, and I'm going to use the technology metaphor here, then you take the traditional insurance system, it's a complex system, meaning that the parts interfere or interact with other parts. And one day how in our relationship happens is different how it happens the next time, one time you call the system and it answers right away next time you call it and it doesn't answer 20 times you call right the system changes all the time. That's what makes it complex. The rules change your understanding the rules change, they just it's changing all the time. And it's complex for you is there's no cause and effect that you can really map all the way through a comp any complex system. So in so think about the interface with this complex system that normally happens is a doctor's appointment. a doctor's point is your interface. You go from having nothing, not a lot of knowledge you just know you're hurt or something's happening you don't like in your body or right in you know know exactly what you need matter of fact over over half of all the visits to a doctor number one reason for the visit is you don't know what you need you want to find out what you need right so you don't know what you need so it's the interface with the system and but it's a very inefficient system interface extremely inefficient imagine if instead of seeing your doctor in the visit and asking what and figure out what you need if you if you could just call your doctor and talk to your doctor and say here's what i'm experiencing what do i need including a visit or maybe it's a streamline to the cardiologists or maybe the emergency room or maybe an x ray first and i'll call you back afterwards there's more efficient interfaces with the healthcare system then your doctor's office right and some things require the doctor's office but not everything so there's the interface is figuring out what you need well there's even a better interface and that's well what if you collect information about you before you have a need and we know what you're what medications you're on what doctors you see what conditions you have your children have and we start to apply some we collect this clinical data about you not claims data right so that a lot of people make money on claims data i'm talking about clinical data so if you have a blood test the blood panel there might be eight different tests and we want to look chemistry level every one of those tests and we want to know how that compares the last month or last quarter last year and we also want to know how it relates to men your age right so that's right so we want to and then we want to apply medical knowledge or expertise to that clinical data so we can apply some strategies which might be a prescription it might be a wait and see it might be a do nothing it might be have a surgery these are all just strategies but they're being applied the clinical data in the medical knowledge come together get married together to create that strategy and our goal our goal in our system is to eliminate that claims data the traditional system makes more money when it creates claims data so there's a huge difference right so we were in we created a model where we don't make money on claims data we make money by avoiding claims data by doing better medicine by looking at the data and applying medical judgment or human judgment knowledge to it right and what i'm doing right now is i'm describing what machines do and artificial intelligence machine learning that's what they do they take data they apply some sort of industry knowledge and some sort of judgment that gets programmed in and then we get enough data it'll spit out the strategy that applies that that has worked in you know the million other arcade occasions where all these data points lined up so it's the same concepts and we're using technology more and more and more and more that i believe when we do get to the point where it's all automated we won't even really recognize when it turned that way because it's so gradual
42:48
right right
Mark Leary 42:51
so in terms of color i get it sort of conceptually are there systems do you use to collect data in past i mean how do i make it super tangible a lot of companies right now are trying to make sophisticated processes conceptually and their number one data management system is email still that is still real and so until you have an industry that's got very mature processes or systems that are built for that where it's really structured you're trying to customize a crm use email and whatever else what how do you manage the technology to get the information in the right hands the right person
Dave Berg 43:26
you hire the right who the right person and knows how to do exactly that to make sure it's secure and private what we do is we start with really basic questions so our job is to we are the interface with our system this ours we have a system and we are the interface with our members and we have to our system has to interact with their ecosystem and that means their constraints around work schedules and kids and understanding and money and anything right we have to interact with their ecosystem so our questions at the beginning our little our scout questions right so i don't want to ask 100 things to complete the medical record and of course i have to if i want to get paid by an insurance company but if i remove the insurance company from the model and i'm direct in the membership i do there's no rules about what day data i need to collect so instead of collecting hundreds of pieces of data i can collect the first four that mattered to me and then i can sift and sort and those questions that we care about right out of the gate are what medications you're taking we learn a lot from that who are the doctors you're seeing in specialties we learn a lot from that and then we ask you what conditions you have and we just list them diabetes cancer heart disease and we list 15 of the things that are a big deal and then we have anything else we need to know those are the four questions that we ask everybody based on the answers we get we then plug those into a population health system that's a system all by itself with a team of doctors and nurses and medical assistants that will then their main job is to apply medical judgment to that data, that information, that clinical data to know who needs more questions. And if I got 100 people, there's probably only about five to six of those people that I like red alert, this medication, this, you know, this disease, whatever. Because we know that even if it's something minor, like like thyroid problems, and we know their prescription is about to be it needs to be filled next week, but their plan doesn't start for two weeks, but they have a need for prescription in a week. That's an easy fix, isn't it? Now? I don't expect you to know if that's it's hopefully it makes sense, right? That because of the timing, but I made it makes sense. There's a lot of other things aren't that intuitive, right, that aren't that intuitive that I need that medication now. But if there's an allergy medication, who cares if you wait an extra week for the allergy medication, through Medicaid medication might care a little bit more insulin, I care a lot. Asthma inhalers. I care a lot people die. Right? So I'm going to take that medical judgment to know how do we prioritize it. And we've created a whole program, it's and we have a whole team, it's called hit the ground running. And the whole purpose is to identify people, when they start our program, whether they're a new employee in a company, or whether it's just after open enrollment, we want to know who are the five people out of the out of the 100, or the one of the five or the 100, out of the 5000, who are new had the great grace probability of need before the first of the month, because we don't want them in the first of the month, because that's when we're busy. Because all these plans start, right, the new people start, I'd much rather deal with the end of the month, when we have more time and resources to your point, you can have the best doctor in the world. And I'll give you that your doctor's best in the world. But when I put my team of doctors and nurses and process in thinking and strategy around your doctor, I just have to do if I did a halfway job, but what I'm capable of what I do every day, I'll blow your doctor out of the water, because I've got systems and process and I've got backup systems on backup systems. Right? So I'm only going to go after those five people before it even starts. And it's gonna be a phone call, because that's from a physician, because that's the best way to deal with it. And we'll, you know, we might use text messages for part of it, we might use a secure app for you know, it's all gonna be through our secure Applebee's text message. But just know, you could have the best doctor in the world and they can't keep up with the 24. Seven needs that you might have in an unexpected way. Right? There's no way they could do it. I mean, I'd say that's the challenge, right?
Mark Leary 47:41
So the old model, and historically is one person that has it all, nothing's ever more efficient than one person who has everything, but they go to sleep, and they go on vacation and they retire. And they do and so they don't scale at all. So in a new world of 24 by seven is actually quite normal. And telemedicine is actually vary here. And if it's Friday night at 11pm, and you want us prescription that is expected now you should be able to do that and to raise the you know, figure out how to balance that care to say, Well, how do I make sure I get the right prescription on Friday at 11pm. Knowing that I have for other medications that
Dave Berg 48:18
might interfere. So here's here's the challenge with telemedicine that is being is creating very low utilization is that information is not in front of the doctor. Right. So the doctors taking a lot more risk when they don't have all the data and they're applying their medical judgment in the absence of data. And a lot of times, that means you're going to have to go see your family doctor in the morning, or you got to go the emergency room or you got to go to urgent care. So when we don't even consider what we do as telehealth or telemedicine. We because what we've done is we've created a complete end to end experience where we have clinics too, we've done well over 3 million visits in our own clinics, and surgery centers here in Phoenix. So we know how to we know how to work with the clinics and in clinics how to run clinics. So when we go and work in Arkansas, we don't own a clinic and we have to we collaborate with another office Urgent Care emergency room we know exactly how to interact with them, because we are them in a sense here in Phoenix. But I lost my train of thought and that was your question.
Mark Leary 49:23
I had a really good was talking about how the relationship between that that individual doc went over. That's what
Dave Berg 49:31
we did is we created the perfect process, the perfect primary care visit the perfect handoff to a specialist, the perfect handoff to a prescription to a drug and we just mapped it out. And then here's what we did. We virtualized it that's different than we started with the service and then we virtualized it that's different than starting with the technology and trying to plug the people into it. Right and in. Our utilization rate is well over 300% utilization meaning that every person every member on average calls into us and speaks to the doctor on an average of three times per year because that's 100% the traditional telehealth service which does hasn't virtualized the whole experience they just virtualized one little piece of it but it doesn't fit it doesn't really fit yet into the traditional system there are anywhere from 4% to say 20% if you're 20% utilization we're 300 member 20% utilization is good for teladoc there's a reason for that and the reason is because people don't go back over and over again because if you call because it's relying on you to know what services and teladoc can do but what if you don't know you don't know your need so we say i don't care what your need is you call us if you're hungry do you think you need a pizza call me we'll we'll sorted through with you right well sorted out and when dinnertime please call me now and say i need pizza i did that with a friend at 11 o'clock at night i made that that joke and i said you could order a pizza in spanish right now and and we'd say yes and try to help you so you know my friend did raise is an eel party he picked up the phone he ordered spanish and any air he talked in spanish and he said he needed a pizza and he hung up right away on my person i go what are you talking what do you do he goes i just got scared i go why'd you get scared because you're a guy in spanish what would you like on it really are and then i had to go find out who it was his name is julio and i go and talk to julio was a you on the phone last night because yeah i didn't know what's going on so i ordered a pizza in spanish and i said what did you do he told me exactly i just went with it i didn't know what i was gonna do i was so scared
Mark Leary 51:47
myself
Dave Berg 51:49
is the culture we built right and one of our core values is always start with yes we can help you not i can help you we can help you start with yes now you might get to know you might get to a different yes but start there
52:02
yes
Dave Berg 52:03
i will consider your your question yes i will get you to somebody who can consider your question right yes it's always the start with yes and yeah i'm sorry i went off on a tangent on yeah
Mark Leary 52:15
no that's good i mean we're actually almost out of time so we need to kind of land this plane so you can get on with your day and so i want to make sure we cover the bases we've covered a lot of ground we talked about different things what else it was anything we missed you want to make sure we get out of the conversation
Dave Berg 52:33
miss let me just double click on something we did talk about that i think would be useful and i do a lot of coaching in the eo accelerator program so this is there's a couple pieces of advice that i give them and i'll just share that advice right here is always start with the consumer the user right so there's difference between the user and the so the consumer is a person using the customers person with the money sometimes are the same so always combined customer and user or customer and consumer understand who they are and make sure you're building your processes and hiring your people and making your decisions with them at the front of it it will make your life easier and in my situation i was the customer and the consumer so it made it really easy for me relatively easy for me to do something that was really really big and hard and i don't i know i couldn't have done it if i wasn't the customer and the consumer at the same time but there's a lot of things that aren't as hard as solving healthcare it could be just the process of i don't know whatever business you're in the it services your company uses it services reinvent the process around you being the customer and and make it even better and even from what people wear to how they talk to eye contact to what they say when they don't when they they're not on time you know just the fine details of that so that's but you don't do that we don't do that unless we really get into the mindset of the cost the consumer and the customer and you can do that with your own services we can all do that as entrepreneurs with our own services and pretend we're actually going to buy it and we're going to pay money and we're going to use it and it just makes a tiny little tweaks and process and institutionalize them and be picky about it and don't be shy about your people thinking you're being picky about how you answer the phone or how you make eye contact that and you know when i always knew that i was i was i'd gone over a little hump a critical mass if you will is when people started making fun of me when they used to like mimic my say what i would say but mimic my voice they don't want to quite own it so they like use this funny voice like it's mine then i got them i got them this is the starting point when they start making fun of me that's the first thing is just be your own consumer of your own goods or services and customer to the money and the user and then the second thing is i find a lot of young entrepreneurs there They're afraid to be themselves and they're looking for somebody else to tell them how they're supposed to be. And my advice is be yourself. I mean, when everyone else is trying to be the same thing, just be yourself. And Cameron Harold's a good friend of mine, we've had this conversation too. And in when we first we before we started, he said, Don't try to be Cameron Harold. I love when he said that. Because he actually gave me that advice once before I do. And I talked about three, four years ago. It was it was I thought it was funny, and it got a good laugh. When I repeated it onstage. I said, Now I got some good advice for my friend Cameron Harold, he says, Don't try to be as good as Cameron Harold, because you can't be and just be yourself. And, and that's I took that really to heart is I don't want to try to be anyone else. I just want to be myself. And that means I'm Goofy, at least is my goofy self. If I make a mistake, it's myself making a mistake I'm not trying to and what that means for me, and I think for a lot of entrepreneurs is just be yourself. And don't be afraid to care more than the world says you should care. Because you wouldn't be an entrepreneur, if you didn't care more about something than the world says as normal care about you wouldn't be an IT entrepreneur, if you didn't care more about it than the rest of the world says is nor Right. Right. So let's dive in care more about it and what you're doing, who you're serving, the problems you're solving, and the nuances of the problem, not just the basic level, right? The nuance and how and how it how it makes your customer feel like a better mom. What gifts, right, just go into those kind of details. And it just love people more, don't risk more risk take the risk of caring more loving more than the world says is even reasonable. I
Mark Leary 56:52
will tell you what's reasonable, just like those places where you can't help but be unreasonable and turn it up to 11 get a beat be unreasonable in the right ways. And
Dave Berg 57:00
I love it when people say I'm unreasonable. Or when I'm giving someone a second chance or a third chances, fourth chance, because I care about them. And I love them. And I just want them to be successful. And I'm going beyond what the world says is reasonable. And it's it's a challenge when it doesn't mean I let it affect my life or get in the way of other projects or missions or other people. But
57:23
I just
Dave Berg 57:24
I don't I see too many people writing dreams off too quickly or people off too quickly or purposes off too quickly. And that's where just take the risk and risk more than anyone says is reasonable around your caring and your love and the personal mission you have.
Mark Leary 57:42
So is that your passionate plea to entrepreneurs right now?
Dave Berg 57:45
Yeah, just care more love more risk more on both those two things.
57:51
I love it. I love it. That's
Mark Leary 57:52
incredible. Well then I'm grateful for the time grateful for the experience share so many great nuggets in there and you helped me clarify some some things and for my own thinking, and so it's been awesome. If somebody wanted to continue the conversation with you find out what you're up to. How does somebody find you out there?
Dave Berg 58:09
Oh, gosh. So I'm clearly the worst marketer that I know of all my friends it seems. And so I can direct to my website redirect health calm, and my email is really easy. It's david dot Berg at redirect out calm and Berg is spelt like iceberg. Gotcha, gotcha II RG and we are we are moving and changing things all the time. And probably the only way you would know about it in real time is if I was talking about it.
Mark Leary 58:38
That's good man. Especially right now a lot of transformation in the world and healthcare and everywhere. Yeah. Well, Dave, I'm so grateful. Thanks for the time. It's been super helpful. I'm hopeful everyone will get get a chance to hear this, get some feedback. And we'll go from there. And so that's it for today. Please don't forget to share with your friends get this in the hands of those people who could use this information this help and of course, give us the feedback. If you love it. If you hate it, we need all that feedback. But in the meantime, we will see you next time on you're doing it wrong with me. Mark Henderson Leary.
VO 59:07
This is you're doing it wrong with Mark Henderson Leary for more episodes and to subscribe, go to lyric.cc