Ron Barshop is the founder and CEO of Beacon Clinics, which is a leader in allergy testing and treatment in the healthcare world. Ron is an inventor and the podcast host of Primary Care Cures, which is really focused on the edge of what it is to fix the healthcare's many broken pieces.
My friend Ron is passionate about fixing the healthcare industry and today, we go over healthcare's many problems and how its weak points are exposed and magnified because of the current COVID19 crisis.
05:38 The end to the COVID19 crisis is in sight
07:10 The new normal will affect the arts and religion.
10:38 COVID crisis exposes the fragility of our current medical supply chain
12:11 A huge chunk of primary care facilities may shut down in the near future
13:12 Telehealth is the future of the healthcare industry
15:54 Insurance companies are winning the COVID crisis
21:36 Is the pain experienced by the healthcare industry short-term?
22:20 Trust is the currency that doctors trade on
30:48 Direct Primary Healthcare can revolutionize the way patients are treated
35:05 The key to health isn't clinic trials, it's trials in the wild.
43:15 Direct Primary Care eliminates unnecessary steps to make the treatment procedure more patient-friendly
47:30 Direct contracting helps companies save money in healthcare-related expenses by cutting out the middlemen
49:45 Our current bureaucratic healthcare system is the biggest hindrance to change
1:00:45 With less patients, doctors get more time to research to fully diagnose their patients.
1:06:50 Self-insurance is the obvious solution
GET IN TOUCH:
MARK LEARY:
www.linkedin.com/in/markhleary
www.leary.cc
RON BARSHOP:
https://www.primarycarecures.com/
https://healthcareisfixed.com/
Production credit:
Engineering / Post-Production: Jim McCarthy
Art / Design: Immanuel Ahiable
Mark 00:00
So we're rolling. Cool. We are live! So this is You're Doing It Wrong with Mark Henderson Leary and I have a passion that you should feel in control of your life. And so what I do is I help entrepreneurial leaders get a little more control of their business. And so part of how I do that is by letting you listen in on conversations between two people who have a passion for excellence, who are in the entrepreneurial world. And so you can pick out some valuable nuggets and insights that will help you break through a ceiling that you're struggling with and help you get engaged and get more out of your business and more out of your life. And so, today, we've got one of those conversations. I'm always excited for these and no less today. Ron is the founder and CEO of Beacon Clinics, which is a leader in allergy testing and treatment, so in the healthcare world in a big way. He's also an inventor. He's a podcast host of Primary Care Cures, which is really focused on the edge of what it is to fix the healthcare's many broken pieces, which is there's plenty of broken pieces in the healthcare world. Yeah, he's chaired two Angel networks in Austin and San Antonio. He's raised money over and over again. And he's authored a couple of books, one of which is called Healthcare is Fixed. But I'd like to welcome my friend Ron Barshop to talk about what's going on in the world. How are you my friend?
Ron 01:17
Fine, Mark, nice to be on the show. Thank you for inviting me.
Mark 01:21
I got to tell you. Normally, I hit the ground running with a lot of enthusiasm and fun and I had Cameron Herold on a couple weeks ago. And he was just sort of business as usual. Like we got to lead. We got to lead hard. There's urgency. But you know, successful companies are successful companies. ThenI had Jeff Hoffman on a few days ago. The guy's just fired up and pumped up with giving, giving back and all the opportunities for generosity and how it can be hard, and it's a struggle, but it's all about humanity coming together. And I just left that pumped up. Today. I'm not feeling as optimistic I've heard in the last couple of days, you know, some people are kind of hitting what I call the second wave of this - I don't want to over exaggerate. I mean, it's a crisis to a lot of people. It's a condition just on people. But, you know, we have 30 days of people really hitting the ground running, making the best of it. And I'm hearing some people who are running out of money and time. I heard one client and friend was denied for the PPP. And I think that he feels like that's gonna end it for him. So, you know, I don't want to be negative, but I want to be real. What are you seeing, man?
Ron 02:38
Well, there's, there's sort of two options right now you can look ahead. I have on my show last week, a gentleman named Rene Wiertz. Rene runs a super cool gravel bike company. Now what a gravel bike is, it's between a road bike and a mountain bike. So it goes on these long dirt roads, we're not gonna have any cars threatening you or your children. So if you live in Austin, you don't drive out to Llano, Texas you can go for hours on these gravel bikes, trails, which are basically dirt roads to farms, you know they're -we've all driven on them. So he pivoted his plant. He's now making masks and respirators and taking old diving masks and putting those into basically COVID-friendly PPE. He's moved his plant all the way to Belgium. He has stopped production of bicycles for now because there's no interest in that. And he literally pivoted in three days, and they are about three and a half weeks ahead of us. So they're on the down curve. They're on the down cycle. And so you can time travel a little ahead by calling a friend in Washington State. They've been peaked out since March 26. Italy's been peaked out since about two weeks before that. So there is a downturn of this. There is a coming back of the economy, there is a there's oxygen above water if you're underwater right now and the question is, is it and one inch above you which is too much or is it one eighth of an inch which is too much As a just in within reach. And so, you know, we can forward project doom and gloom and cash running out or we can project maybe that this is going to end, our governor in Texas is going to get on the air sometime today and announce a reopening of the Texas economy. What that looks like, is a whole another story. But you know, for another question, but the good news is that so you can - the other option, so you can pivot and you can shift gears into another direction, and recognize, what is your real core business? Or the other is to just look at it and say, you know, this is gonna end and there is - there are economies ahead of us in this cycle. And, you know, we're not too far behind those economies. We're literally weeks, not months behind. So -
Mark 04:42
You see, I take that as well, I, there's the macro perspective. And when I have these macro conversations that I talked with multiple leadership teams, multiple companies, in the span of a couple of days, I get fired up about how aggressive people are retooling and working hard and making tough decisions. And I'm like, we got this and then I kind of switch hats to the micro level, like I take every little thing personally because there are winners, survivors and losers like that, like the three. And so when I hear like a story of a loser, I like somebody who takes the bullet to the head, because there is that. There are people who just did not have a retooling option. It was just lights out. And so I guess I'm just tipping off my hat for a moment of those people who are like, not as optimistic like the people are like, this is all Pollyanna bullshit. But I do - I do agree that to see that and so you're seeing that, when we do reach out of our geography, and we can see int o the future, there is the end in site is real.
Ron 05:38
Yeah, and I also got on the phone, I was in an Asian Bridge forum for a brief time. And I talked to a guy in the Philippines when this first started. He's sitting in the back of his pool. His gorgeous wife and his beautiful children are playing in the swimming pool behind him. He's got a Mai Tai in the sand. It's got some really cool Ray Bans on and the guy is chilling professionally. Now he has racetracks, there's not a lot of demand for racetracks in the Philippines today. But to chill professionally is not a bad move, right? I mean, he learned the art of relaxation. And he said, yeah, you guys are like in that early. I remember the early stage of that cycle. But you know, six weeks ago, we're way past that now, you know, we're coming out of this thing. So, you know, I again, it's a time travel - you can go I literally talked to a guy in Bellevue, Washington just outside of Seattle. And their - looks like their economy's gonna be opening up very soon, too. So it's not a fun time to get turned down for a PPP loan. This happens to a lot of people for a lot of different reasons. And money actually is run out of that program. There's, it's going in stages and tranches. And it's this first tranche has run out, so that I mean -
Mark 06:41
so do you think we're gonna have kind of a second punch in the face?
Ron 06:44
I think life is gonna be - I can't imagine. Do you remember when you were sick in college because you drank too much and you're hugging the toilet. And you can't imagine wanting to live for three more minutes. But if you can just hang in those three more minutes, you're gonna be fine. And then you know you're having breakfast for eggs and bacon in the morning, you feel just great. And you forgot how bad you felt an hour and a half ago. And I think it's going to feel a little bit like that. I don't think it's really that dramatic, but we're going to forget, I think, you know, if you look at what supports symphony, if you look at what supports synagogues and churches, it's gray hair, and I don't think gray hair is going to turn out, you know, shoulder to shoulder at symphonies anymore, or churches anymore, which would be heartbreaking because the arts is really kind of a foundation of culture in America and certainly religion is a more important foundation of culture in America. So, and more than culture it's the foundation, it's one of the bedrocks of what the country was founded on so I worry that church support and synagogue support is going to start falling off because people don't want to be around a lot of other people and I hope that's not the case I hope that faithful now you know, sit four pews apart or three pews apart or - but you know, but I can't imagine that the symphony wherever have ever have a sellout they're not going to have you know Itzhak Perlman sell out the whole place because that many people with gray hair don't want to be close to that many people with gray hair. It's too scary now. So I think there's some fundamental foundational things are going to change in how we deliver arts and religion in any - even you know, young concerts - why were people at Spring Break a week after we knew there's trouble still parting and having a great time because they felt invulnerable and they became super carriers you know, many of those people are back into their community spreading it like ridiculous but so... I don't think you're gonna have trouble seeing what, 1500, 15,000, 150,000 in a stadium, listen to music but I don't think the gray hairs are going to be there. I don't think they're going to support that music so I don't know -
Mark 08:34
There's a lot of - I mean, my mind goes to all those things, you know 'cause I remember stadium concerts where there's 10s of thousands of people just on top - literally on top of each other. You know, like rice stadium monsters rock, you know, doing things and I'm like, is that like, ever coming back? I don't know. I mean, maybe maybe we are - immunity comes back and the herd immunity's strong and within three, four years, we've all forgotten, I don't know. But I'm kind of curious, from your perspective. From the healthcare world, because I have a - what I've been wondering through this process, the healthcare lens colors this in a big way, because they were the ones who felt it. I believe - and I'd love you to correct me on this. It seems like this was a health care problem before any other problem. It was, we're out of PPE, we're getting crushed at the emergency rooms and we're running out of beds and ventilators in spots. And so that became the problem. And so the rest of reactions were colored through how do we take that pain away? First of all, is that even is that - resonate at all? Or-
Ron 08:37
are we have a real fragile supply chain, so when Puerto Rico got hit by that giant hurricane, 95% of the IV bags in the world got cut off because they're all made in one little brick building in the middle of near San Juan. And so the world is scrambling now. How do we get our IV bags? We need these drips, we got to have the saline and the medications delivered. And every time you forget how much it rides on. It rides on a little plastic bag, with a little plastic straw and a little needle attached. That stuff is - the sterility of that's super important. Well, we've now learned that we have about 156 critical medications that are coming out of China and India. And they've embargoed us back because I thought they're going to need stuff there hasn't -China claims they haven't had a single death so they don't, you know, they don't need to keep hanging on supplies. We don't believe that. But when we're getting so much of our pharma from these two nations, and then literally, you can't have a flight that can cargo them over here, that is not tenable. So what they've done in Italy is now they're encouraging with every kind of incentive manufacturing, on site in cities. So 3d printing is going to become a huge, huge component of manufacturing and it's going to almost make China obsolete, like China has made our manufacturing we think of in the heartland obsolete right? But 3d printing is going to bring it right back to the heartland and right back to the states and right back to the cities right back to the local and it's not far away. We just - people that had three and five year plans to 3d print are now talking about three and four or five month plans. So we can't rely on oceans to, you know, to be crossed to get things here again, because we could have a second strain of this pandemic in two years, you know, C - so it's called C19 cause there was, there's not a C18 through - 1 through 18. It's like I beat C1 through 18, I made it to 19. It was like 2019 is when they discovered this strain, but so that the medication supply chain - super fragile. The PPE supply chain - super fragile. I talked to doctors today on a giant conference call. Some of the biggest and best practices still can't get basic supplies for gloves, for masks, for the right equipment. And so they're sending their employees into this frontline every day. But what's happened in primary care, which is my world, is the big practices what I call Megas that are 10+ doctors. You still have to pay those salaries. Those guys are still making 10 grand a month, 15 grand a month, yet the volume is half. So imagine if your store - you have to pay every store executive, every store employee, but you just got half the people coming into your store, you're dead. I mean, you are running in big time red ink. And they were barely surviving when you know, was full. So primary care there - the talk right now is by the first week of June, 60% of all primary care practices will be shutting down and that include system-owned practices and thatincludes the 30% that are still independent.
Mark 12:24
So that just, that sounds bad, like really bad, to me. I mean, does it mean the classically recession proof industries? Like that's it right? And you're in you're saying it's... how bad is it?
Ron 12:37
Well, that is your pediatrician for your kids. That's your internist for your mother. That's your family doctor for yourself and your wife's - her OB GYN, that's primary care. And those people aren't allowed or shouldn't be seeing people and only 20% of them had telehealth. Telehealth is - I have for all my employees telehealth, so every one of my employees can still get scripts They can still get a rash looked at by a doctor over the screen. They can get about probably 80% of the service that the doctor will provide with a telephone and a secure app. So telehealth is clearly the wave of the future, but only 1% of Americans were using it. There's a - I had on my show, Gordon Chen. Chen Medical is a probably 20 state primary care offering that's now expanding Houston next year. They deal with only Medicare patients. They got virtually 90% of the older 65s into a telehealth app in two days, and they wanted to know, do you have enough food? You have enough medicine? Do you have enough care? Do you have any questions? We want you healthy and happy and each doctor only has 400 patients. So that business model is doing very well because the government sends them what's called a capitated check, which is a fancy word for a set amount per employee per patient, no matter how many come in. So you can have one come in or you can have 1000 come in and you'll still make the same amount that day. That looks like that model is the new survivor. But it's only maybe 20% of all primary care. So when I say 60% of closing, that's the fee for service. That's where you come in and you show your card, fill out a clipboard, see your doctor, he bills for that service, he codes for that service. In fact, in that visit the only caregiver you're seeing as a medical assistant that's cuffing you with a blood pressure cuff, weighing you, and giving you a pulse ox on your pointer finger, and then the rest is all done. And behind the scenes of another 10 to 12 administrative types to just get that doctor's money. Well, that system is now dead, it's on the edge of the diving board. It's about to fall off the diving board, about fall in the pool. It's on its last bolt.
Mark 12:38
So that's - I predicted a revolution in healthcare for a long time. You know, for a lot of reasons, and I've expected an entrepreneurial threat to be the way that came about. Somebody was coming out with a better way and that the old way was very much like you described - insurance driven, non-customer oriented, like when I would go in to - would ask about - it was a short time when I was completely out of pocket. And I was paying whatever the price was and so I would potentially negotiate it. I was shocked how often I would ask the price of a procedure. And no one could tell me, like there's it's not like normal capitalism in the past. They didn't think in those terms. They didn't, there was no market. It was just you get paid by the insurance company in this game that they do. And I'm like, this is not working. There's no competition there. This is - but I did not expect it to come like this. So it sounds like this is forcing that revolution right now. And I guess going into this, I thought, well, if 60% of the private practices or the family practices are going to be out of business, because that sounds like a bad economic hit. But now it's paired up with well, I think we needed this revolution. Is this a good thing? Is this a good thing? Is this a bad thing? is it both?
Ron 15:50
Right now for the short term, it's only bad. Here's who wins in this current weird scenario, this black swan event. The insurance companies think about it. Let's take that 30% of Americans are laid off for furlough, let's just say 50%. They're still collecting 50% or 70% of the premium they collected the day before this hit. So the insurance companies, there's five big ones, we call them the BUCAH: Blue Cross, United, Cigna, Aetna, Humana. Those guys are still collecting 70% of what they collected the day before crisis. The day after crisis, they're not paying out. Their most expensive - a third of what they pay out is hospitals. Their hospitals are literally cutting 50% of their staff, 30% of their staff. I've seen 129 announcements, and they're furloughing for two weeks, four weeks till the duration of this, you know, a big chunk of their staff because you can't go in for elective surgery. You can't go in for chest pain. You know, you can't go in for the normal routine stuff. And the worst place everybody knows to go to catch COVID is a hospital. 20% of the people that check into a hospital are dying and my age category, your age category, and your wife's little sister's age category. So there's three categories. We have a 1-in-5 chance of catching it. It's literally dying in the hospital. So last thing you want to do is go to a hospital. And so that's really hurting their volume, as you know, and as it should be. Now, the good news is - so the insurance companies are the winners. The good news is that they should be cutting staff. shaving back, like we all are. Thinking through, you know how to offer a slender delivery, a thinner delivery. And instead they're asking for government bailout. They're literally going for the same Marshall Plan that the hospitals got. Now the hospitals. Some of them you can make the argument with some Boston hospitals with 2.9 million in Cayman accounts offshore. You could argue maybe they should opt in and out of this Marshall Plan that they got $450 billion. But now if the insurance companies have the nerve, those five guys have the nerve to ask for a bailout themselves. When they're only taking cash in and they're paying so little out. I mean, it's just, I feel less helpless here and being able to help my field and I feel like as a taxpayer, why are they giving our money out to these these monopolies and they are monopolies. So is it a good thing to lose primary care? Those doctors will always have job security at a hospital. But when we have - right now, about 30% of all doctors are independent. roughly the same number of surgeons are independent and you have lower infection rates at independent surgery centers, you have better outcomes. They've done more procedures often. So generally, when you go with an independent physician, you have lower burnout. Do you want your physician that your wife to go see or your children to go see or you to go see they have a two-thirds chance of having burnout, being depressed while they're treating you? Because that's what's happening all over America. Two out of three primary care docs are - they're lost when they go to work. They're not want to be at work. They don't love their job. They don't love their life, because they're right now, but there there's a small - here's the here's the ray of hope. There's a group called direct primary care, virtual primary care and direct Primary Care right now is about 2 to three thousand docs out of half a million primary care docs and they are seeing the patients directly for a membership fee like a gym fee. And it's like belonging to a netjet private jet membership, you get this really first class care. And you don't have to pay a dime more for a large panoply of services, urgent care, chronic care. Just you know, get your kids well checked, get your wife, you know, get a women's well check. But you also get dermatology, you get - there's a whole wide per provider provision of services. And it's for 79 bucks a month for most of the clinics. There's 12 here in Houston. There's literally 1200 across the country in every state, but one. So those guys all are on telehealth and those gals and they all - their patients are all having access. They're not closing their doors, they I mean they can't close their doors, but they're only seeing five or six patients a day. So the bright hope that we now know is direct primary care. And every senator in the senate wants to open up more financing for them like HSH you can't use for direct primary care for some strange reason but there's one senator and his name's Wicker. And he thinks that it's for rich people. Direct primary care is actually employer paid for blue collar workers and white collar workers. So it's it's totally democratic. But that is a ray of hope, as we now know that has survived value-based care where they're getting this capitated monthly amount no matter what - that's going to survive. But the vast majority of doctors out there is are fee-for-service and they are looking at their bank account just watching it melt away. So the hospitals are going to be fine. They've got their cushion. They've got their PPP plan, if you will. The doctors have a hundred billion, but it's being released too slowly to help them out. But we'll see what happens. I you know. but we'll see what happens with all that. That's how quickly can the government release money they've seen they've done a very impressive job so far.
Mark 21:02
So they have done an impressive job so far.
Ron 21:05
Yeah, I'm impressed with how fast the early appliers - applicants for the PPP got their money. You and I know a bunch of people that got checks quickly. I talked to a person yesterday and she replied too late, and she missed out on this first round, so she's gonna have to wait for round two. So she has been denied. That's a sad letter.
Mark 21:23
Yeah, yeah. I think that's kind of what happened to my friend as well. So yeah, it's do you think - well, how much of this is short term pain and medium term? I mean, how do you see this playing out? So what's the block now? So if you're reaching out to your doctor you. is it because the practice just gonna close the doors and turn off the phone lines?
Ron 21:37
If you're a patient, and you can't go see your doctor you feel well... so the good news about Gallup polls are you're regularly rating firemen, doctors and nurses at the top of the Gallup poll for 20 years as most trusted. At the bottom, our car salesman and pull up politicians where they belong. But if you've trusted your doctor before, and now he says, I can't see you. Even if you have chest pain, I can't even call you or text you. And that's 80% of doctors. I mean, is that still gonna be a trusted source of advice and wisdom? I hope that doesn't. Because that's really the - that's the currency that doctors are trading on is trust. That's the currency you trade on as a coach. That's the train currency I train on as a CO, is do people trust me, am I doing what I promised to do? And as I say, I'm going to do it. And again, that's where your EOS system's so wonderful because you learn to trust each other in teams. When you're implementing on EOS. It's a little plug for you But I think they'll still have the trust. I think that will survive this and people will forget that their doctor wasn't ready technologically for them. What's gonna happen, there's gonna - it's happening now it's going to happen in the next 45 days. I think Texas reopening our economy, selecting who is healthy and who is not that can go out. There's a technology component to who is being tested and it's got a clean bill of health. I don't know what -
Mark 23:08
You don't think it's a - imagine, so in two weeks - I don't know what the plan is at all. But if two weeks from now he said 45 days, but two weeks from now they say, you know what, you can go to the doctor. That doesn't just create a line at the door for them?
Ron 23:22
It theoretically should if you had an elective procedure and you want to go back, do you rush back or do you think that that like a hospital is a place for you to catch disease? Okay, because we know that the disease floats in the air for this many hours. We know it lands on plastic for that many hours, on metal for this many hours. Do you worry just going out in public? Are you accustomed to train to stay in your home maybe a little bit longer just to wait this out? There is no - there's not gonna be a siren, all clear, tornadoes gone, you know, it's time to move back into normal life again, there's nothing like that. It's just gonna slowly flow.
Mark 23:53
I get that the siren isn't going to do that. But I'm not convinced at the people aren't gonna do that. I mean, I I've been out there and there are people who just who - there's like all things, three buckets. There's people who take it to the nth degree and they just don't trust anything for like weeks they can contain the germs. There's people who are really just trying to look at the specific guidance and try to understand it. And there are people who are just following the surface level of instruction of like what you can and can't do, and they don't get it and they don't understand about social distancing. They don't and they're not they're just going to be the sheep. And you can see these people down at the grocery store, you know, they're there. So I'm not sure if you say doctors, you and doctors, I don't think I would love your opinion on this. I'm not sure the doctors get it either. I feel like maybe doctors have been so used to their their habits for hygiene, that they didn't really change much, but they know they're in contact with diseases all the time. And like the dermatologist I went to a few weeks ago, I didn't really get - they shut some things down but I didn't get to really the sense that they were afraid. And I feel my hypothesis. If they say doctors, you're back to work, they're gonna most of the doctors are going to be better back there, and that third category of people are gonna be like, cool. I can get an appointment on Tuesday and I'm going, that means it must be okay. Because the appointment's open.
Ron 24:09
We know what your theory is correct, because the medications haven't slowed down, people that need their meds aren't stopping their meds. People that are desperate for for some kind of a surgery, they're still getting their surgeries when they're necessary. So, but the elective stuff, the, the older, the 45 or 55 year old that may be at higher risk, are they going to go back and get their eyelids done when they don't work when they're not sure if that office is all clear, there is no, there's no sign we can put a surgery center that says our infection rate is zero or 1%. would be would that be nice to have a color code where you could drive by and say, oh, that surgery centers are green, and that one's a yellow and that one's a red, I want to go in the green because they're all clear. They haven't had any infections in the last X number of days, or some acceptably low number under 1%. But if it's an 8%, maybe I don't want to go to that red one. Would that be nice to have some way to - an app that tells us where our The infection rates the lowest
Mark 26:02
Well, in regular business world, which medical is not, that becomes the burden of the entrepreneur. Like, that's how you win. Like, if you're one of the 1 to 10 percent of the company to say, like, you know, we got a way to prove that. We're putting a sign up, you know, this house did not flood You know, there's a way to say that and will healthcare respond.
Ron 26:20
We actually know the infection rates, we're not having to guess but it's not. It's deep dive data that's hard to pull out. And so yeah, that would be a good RX solution, we now can go to good RX and get the lowest price prescription theoretically. I mean, I so we can have any app that's as popular as good RX that tells us where the lowest infection rates are.
Mark 26:38
But why wouldn't the hospital do that, why wouldn't Memorial Hermann to say like, we're gonna publish that data and get your butts in here because we are awesome.
Ron 26:44
The stories they're telling now are really shocking me there. I came in, I got healthy, I left. So they had a lieutenant on the police. He walked out and he's high fiving all the nurses and they're all applauding him. He was at death's door a few days ago. That's a great story because hospitals never told those storiesbefore and showed you the face of the nurse that treated him. That's happening now those stories were just, we've got this doctor we got that's, you know that we're killing cancer where, you know, they're talking about like constitutional revisions and people want to know about on the ground, are you helping people? And so at least their story is changing. But your question was different. It was like, can they tell you we've got awesome infectious rates, most hospitals don't have awesome infection rates. The hospital acquired infections and medical errors are the third leading cause of death in America. It happens in downstream. So the beauty of primary care is it's an upstream cost savings. In fact, the two largest primary care groups in America both the CEOs had amazing quotes in December just few months ago, and Sir Andrew Witty who just left to start a COVID crisis team. He left Optim which is owned by United Health, the biggest 800 pound gorilla and he said that if you spent 5% on primary care upstream, you can save 95% of this headache downstream because most of those primary care doctors can head off at the past the chronic stuff that happens later. Meaning, think about it if your kid goes to the ER because he's got an asthma emergency, he didn't have enough albuterol the doctor didn't give that find a cheap enough where you could get a one in the backpack, one in the nurse's station at school, one on the babysitter's backpack, one on the kitchen, one on the bedroom, that kid should be inundated with albuterol so there's never an asthma emergency. That's called a care plan. And you can have care plans for all kinds of chronic conditions, whether their mental hypertension, diabetes, having enough medications kind of step one of any care plan and a lot of people run out. And that's a large percentage of ER visits. So
Mark 28:40
Well, this is the classic problem I see in all technical industries, that the solution's complex, and that's real. People win in the market, entrepreneurs win because they can put a sign up with between one and five words that solve the problem mentally for the consumer. So if you're saying, and you're sharing a lot and so if I'm getting this wrong, I want you to correct me but I'm hearing that we've got a potential fear problem, we've got a potential like real problem like if our infection rates in the hospitals in various parts of healthcare are not where they need to be that might even be a latent problem, like people, like we could have a second wave of infections, but how does primary care - can primary or any kind of healthcare segment say, hey, we see the problem, and we can put a sign up, like, you know, come to us, like, you know, like the care plan thing that's complicated. But how does primary care say, you were going to go to the hospital before? Don't. Call me and we'll do something different. Is that is there an option here for healthcare to rise up to this?
Ron 29:51
I'm working on a company now that I have pulled together four different CEOs from primary care, from radiology, from ancilliaries and from Artificial Intelligence apps. And so the four CEOs have come together and we formed a company called New Way care, we'll be raising capital so I can't really talk about that part of it. But I can tell you that what - here's how this works. is If you pair the best in benefits practices, which is you can share, you can take your benefits cost down as a health care cost 30 to 40 to 50 percent Today, like building a brick by brick plan, that is the Mark Leary Inc, plan, instead of a BUCAH plan, you can literally build it from the ground up all the same pieces, so it looks smells and acts like a duck. And it's 30 to 40 percent because there's a lot of wasted administrative burden in the current system. That's ridiculous. So you build a non administrative bloat that's so you get the best benefits, practices, you get the best of primary care practice, which is direct primary care that's again, this free monthly offering where nobody has a co-pay. Nobody has a deductible. Nobody has a premium. And all of my employees today can literally get their kids pinkeye handled by phone today. They can get their ear infection handled by phone today, their husband's sleep apnea by phone today. costs nothing, okay, it's all handled description, how it's handled. And then the cost per pharmacy is pennies per pill versus larger dollars. And the third component is to have artificial intelligence with sensors at home. So we didn't know anything about whales and whales, when we put sensors on them, we learned that they have mating habits that are deep, deep, deep in the oceans. They feed down there, they rest down there, they could spend long periods of time so what we thought we learned at SeaWorld, we knew actually, by putting sensors on them a whole different animal. And it's the same with sharks and jellyfish and literally dozens of species. What we've not done in America is we do clinical trials at SeaWorld. So all the clinical trials are considering the clinic as the place where you're going to get a perfect test. The perfect test is in the wild because only 1% of the patients are seen by 1% of the doctors at 1% of the time, meaning you're gonna go in for one hour during a year, typically or two hours during a year. And if you think of all the hours in the year that's not even 1%. Meanwhile, you leave the doctor's office and you get bombarded by about 9900 messages that are saying go to Whataburger, you know, use your Xbox, watch The Tonight Show, binge on this Tiger King show, and you start getting excited about basically, you know, doing nothing. Inertia, eating crap and getting bad stuff. So the problem when you get into a laboratory is it's not real. It's completely manufactured when you get out into the wild. And you give somebody a couple of sensors that they can wear and use in their bathroom in their kitchen, you get a ton more information. And you know, you learn how they can heal themselves. And part of the problem is, is clinicians, you have a limited supply of clinicians are limited to five hours you can get in front of a patient but in the Real World you have unlimited time to follow this data exhaust that comes from the sensors and learn what's working for those people just like Mark Leary and those people that are just like Ron Barshop and those people that are just like your wife and my wife so we can actually group datasets and find out what is the most efficient way to get good sleep hygiene, what is the most efficient way to get good hydration? What is the best way to walk and move? What is the best way to lose weight by, what's your nutrition looks like? So the old model is go to a weight watchers meeting and get shamed and you know, cheer for the people that lost a few pounds. The new model is follow what Mark Leary did because he's lost seven pounds this week walking, you know, 12,000 steps a day in Memorial Park. And by the way, he's got a walking group, you know, you might want to join at 6am every morning he meets here at this church.
Mark 30:11
Well, how far away is that?
Ron 33:48
If we get our funding, 90 days.
Mark 33:52
Okay, so you're launching, how far away is getting enough data?
Ron 33:56
The company that we're - the company that actually pulled this off. There's two companies in America that have actually reversed diabetes. One of them is called Virta Health and they have a real cool keto app, a lot of coaching, a lot of dietitians. There's a whole, called a constellation around each patient. That is still the model where the expert tells you what to do. The model with Wellsmith at the group in Austin that was supplied was funded by Cohn health out of North Carolina, took a different approach. They said, if we tell you in an app, what you need to do next, what's the next thing that you need to do Mark? You will do it. So think about it, you're driving in the green lane, or you're driving in the yellow lane or you're driving in the red lane. That's what the app taught you to do based on the sensor data 91% engagement with five - three different clinical trials. 30% diabetes reversal.To reverse diabetes 1% is a big deal to reverse it one out of three people is a huge deal, to have 10% engagement as a giant thing, to have 91% engagement is unthinkable. So we're the CEO of that company, the founder of Wellsmith. There's one of our four CEOs, we believe we've cracked the code on what it takes to bring health to America. And it has nothing to do with clinical trials. It has to do with trials in the wild.
Mark 34:56
So that's interesting. I mean, it sounds - there's two things that come to mind one is it that sounds very futuristic sci-fi, but you're saying, you know, it's kind of here. And actually, the way you painted the picture of well, it's an app, you know, and we're gonna we're we don't have to like track you for weeks to know what's going on. We can give you some instructions step by step. But the thing that I've always thought was so missing in general primary care was a feedback loop. Was always like, here's a prescription and go away. And that was the end of it. Like there was no - it was like, if you come back then we'll try something, if you never come back. I never found out how that went. Like did it work? Did I give up and I go to another doctor?
Ron 35:51
There are models that are working for my show. Chris Crowe is a doctor has over a million patients with his Accountable Care Organization, value based so they're okay, but they're in Dallas and they're North Texas and Oklahoma. And what they do is they send you a pill pack, and it's a AM/PM blue set of pills. You take a yellow set you take in the morning, so a PM and an AM. And you crack open the yellow AM. You shoot your barcode into your phone, sends it to Chris Crowe's doc. The doc says, yep, Mark Leary took his meds for the morning. And then you do the same thing at night. You shoot the picture at night.Yep, he's compliant. Adherence is typically about one out of six patients follow the med - prescription as they're supposed to. In his universe, it's five times that because of that simple, technological ease. They've taken the friction out of taking pills. People get these pills. No, no, do I take these in the morning in the evening, I take two, do I take one I forget. And most people aren't medications aren't on just one, they're on two or three or six or eight. So about 60% of Americans take a pill a day. And about 60% of them are taking two or more pills a day. It gets confusing and it gets expensive. So if you take the friction out of it with our model, which is you know, the prescriptions are no cost because the employers paying for it in a typical employer paid plan. If you take the cost out of the - friction out because you have a pill pack and an AM and a PM, and the doctor can see you're in the green zone with your medications, we now know we can get people compliant on their meds. We know they can be, and there's another model Chinmed. They have pharmacists in their clinics, so they dispense the medications when you leave the clinic now, do they know if you took them or not? to your question? No. But now in Texas, you can't have dispensaries because a lot of people are marking up the drugs and making big profits and it wasn't fair to the patient. So you can't dispense in Texas at most clinics. But, so there are technology solutions out there that are making people more compliant with their medications that are really pretty simple, when you think about it's just, the patient becomes the quarterback. They're taking the drugs. The doctor becomes the coach, I saw you took them Attaboy, run that play again, and the cheerleaders are the amazed, the nursing staff in the mid levels who are calling the guy and saying I see you're off for two days in a row, what's going on? Let's talk about this. And sometimes it's just, you know, I hurt my back and I am unable to get downstairs to the kitchen.
Mark 38:10
So this sounds amazing, because what I see there is the ability to adapt, like you're not compliant. Why? Well, I keep forgetting. Well, we can do something different. You know, I can do the once a day instead of the ones the - we know the we can do once a week instead of once a day. It's a different medication. It's not as impactful. But if you're at least if you're taking it, it'll work better than if you're not taking the one that works better at all. But that's great. What are people going to see? How, me right now, we're going into a whole new situation. The next 60 days, is what you're talking about dreaming for next year or thats -
Ron 38:46
It's all happening now. So I want you to - well yes, it's gonna take some time.
Mark 38:51
30 days for now, what are people going to see? What should people be looking for? What questions should people be asking like, I need to get a great healthcare experience in the next 30 days, what do they do?
Ron 38:58
I mean, if I had simple advice, I would have them call a company called Redirect Health who I use in Arizona. It's an amazing telehealth service. They do their histories over the phone.My patient - my employees have been on it for two years. I was the first employer to use them. I would go to look up DPC frontiers which is Direct Primary Care frontiers and find a good direct primary care doc. They're all on telehealth. There's a lot of virtual primary care companies like 98point6. There's BowTie Medical, there's Catalyst. These three virtual primary care companies that have been on my show, all of which again, you can get a doctor to take care of you while you're waiting for this next phase of what's going to come. So I'm not saying leave your doctor but I'm saying if your doctor looks like they'reinaccessible, you can literally make a phone call today to redirect health and get for $49 a month. get on a plane quickly and immediately and they'll do it.
Mark 39:55
But this is not - HSA will not pay for it.
Ron 39:56
HSA, well today, not pay for that.
Mark 40:00
Okay, but 50 bucks, no co-pays
Ron 40:03
50 bucks, you know, got access to a doc. No co-pays, no deductibles, no charges, no scary anything.
Mark 40:09
It's not - now my understanding about it is it's just not trying to compete with concierge medicine. A lot of people equate it with concierge medicine draw the -
Ron 40:16
So concierge is they take insurance and they take monthly memberships like direct primary care. So there they literally have the worst of both worlds because while they're charting at night from their insurance patients that they're billing and coding for, they're also taking texts at night from their direct contract patients that have paid them a monthly membership. You've literally got the word - I call it a hybrid of hell. They're literally in the worst of both universes because they don't get any peace at night anyway with the fee for service now. Yes, they have more stability of income, but now they're getting texting at night. You know, my son's got a diaper rash. What do I do? You know, it's like, really, you know, I've got these seven more charts. I got to finish them. I didn't get to have dinner with my kids tonight. So it's, I don't - I don't know, I don't think that concierge is really a lovely solution for anybody that - there are companies like MD VIP that have had great success with it, that needed an army of attorneys to stay open, because there's a lot of tricky laws in there. But MD VIPs is saying, hey, just abandon fee for service and go straight to your 20% of your patients that can afford us and just, you know, abandon the other 80%. That's problematic if you're part of the 80%. Now, where do you go? You know, so they have 25 patients now they can take 500 and that's a good -
Mark 40:17
so concierge medicine tries to use some - it's basically one or one doctor or a small number of doctors trying to get high premium, high margin clients by being extraordinarily -
Ron 41:43
Just get in line first, and I'll call you back when you call me that's it's old fashioned Marcus Welby, for people that are that age, but yeah, toss calls and I'll return your calls and I'll see your texts and I'll look at your videos and I'll diagnose over the phone. That's what comes - but DPC seems to be like, it can get confusing because when I worked with DPC for a while, I did have like one doctor, like, I had a doctor that was mine. And it did feel very personalized in that sense, but, and it was a company, you know, and it was a little smaller, earlier startup. So it was very entrepreneurial. And I knew like everybody in the company. So it did kind of end up with like, I would be like, why are you responding at 11pm? Like, you can let me know about the prescription availability tomorrow, and she would say, well, you know, I just had some time. So it was kind of the worst of both worlds and it was becoming concierge in that sense. But I guess, direct primary care when it works at scale, is doctors and physician's assistants, working a regular schedule available all the time work, but like there's a team. So the night team is the night team. The day team is the day team and when they go home, they go home and they unplug and everybody's got a role, but you get it for 50 bucks a month you get access to whatever you need. So in their reducing in cost through scale, they're reducing cost of productivity and lack of bureaucracy. What else am I missing to take that picture? So think about their 16 steps if I want to go see my doctor in fee for service or traditional medicine, if I don't want to bore your listener, but just I've got to call the doctor, I've got to schedule the appointment. I got to get in busy traffic. I gotta go see the doctor. I gotta wait with people hacking and coughing around me, baby's crying. I go see the doctor for 15 minutes. He's honest, tapping away on his computer. You know, she's not able to really give me eye contact. And then she gives me a prescription. I then have to go give a copay, check out with a credit card. You know, I've already done the clipboard in the waiting and then I've got to go back in my car, go to the dispensary, get the pharmacy prescription, go back home. That is and then I get an EOB and explanation of benefits that is the massive, most confusing bill you'll ever get. It's not even a bill. It's an explanation of benefits, it explains nothing. So that's 16 steps. Direct primary care, I text. This is literally what I did yesterday. I text my doctor scripts running low, handled, here's your code. I go to CVS, get it filled, I'm done. It's that simple. Now CVS can mail it to me so I can even skip that step. There's literally 14 steps cut out. How about that?
Mark 44:16
So that's - what's the difference between direct primary care and just telemedicine?
Ron 44:22
I described direct primary care just now because I have a direct relationship with the doctor, I pay a monthly fee for. Telemedicine, I have to do all those other drills and I can't avoid that. They still got to bill me, they got to code me. Now here's the problem is, the billing for telemedicine if you're a primary care doctor replaces about 33% of what a face to face visit is so now I've got to bring you in through all those 16 horrific steps to get paid as a doctor I got to make you go through friction. It's the worst. It's the worst of worlds because I can't get my kids fed if I don't get you to do that friction. That's not a good incentive, right? That's called perverse incentives. So fee for service has been argued by Ivory tower, Ivy leaguers that it's dead and it has been dead for a long time at this crisis just proved it. And I hate it because all my clients are fee for service. So I'm - my business model is relying on them. Some of my new business is not by the way, but I've watched these guys suffer and it's just heartbreaking to see my clients suffer, but to talk to doctors all over the country on my show, and they're all suffering except for direct primary care except for value based care. Those guys are doing just fine. They're actually kind of happy right now.
Mark 45:34
So how does like the -and like again, correct me because I'm very much novice at some of the stuff although I'm interested in it. What's the company that offers that overlay for telehealth?
Ron 45:46
There's 50 of them I mean, there's a lot of them
Mark 45:48
Yeah, but there's - okay, doesn't really matter. I guess then there's one I think that comes to mind but how does that fit in because they seem to function very seamlessly on top if you don't - in the old days, if you need a person scripts for your kid at 11pm on a Friday night, don't go to the doctor just click here and get an appointment with a doctor. And then 10 minutes later you get a prescription or whatever. And so that's very frictionless. But it isn't. It's sitting on top of a traditional insurance and doctor situation and I guess it was provided more commonly by the insurance company as a way to, I guess avoid you going to the -
Ron 46:24
Well, everybody provides it, but there's only 1% utilization. It's not the most common way of doing business when you're - we've been trained like seals to clap our fins together when the fish is coming. So we don't know there's a better simpler way. My employees - I had three employees out of, all of my employees that weren't on this plan. So I didn't have 100% participation. I couldn't figure out why. Well, I have Medicaid. Okay, well, you know, Medicaid is great when you have babies, it's free. How about when you got pinkeye? How's that work out for you? Well, I got I mean, time suck is a short answer to a long question. Okay, so how about that time suck. Do you want to skip not missing more? Do you want to skip? Not worrying about picking your kid up at three o'clock? Do you not want to skip not making him a super carrier of pinkeye or an ear infection and being around other kids? Do you want to skip that? Because you can actually call this number that I've taped on your computer and avoid all of that now, so you can have to drop out of Medicaid. But if you're not planning on having more babies, that's a pretty good outcome, isn't it to not have that to deal with. To get pennies for a pill instead of you know, $5,000 premium with with my old plan with that. No, you don't need anymore the burden of the old way. There's a new way coming. It's not going to come immediately. It's going to come slowly, but it's called direct contracting, where employers which represent most of the employment of 140 million Americans that are self insured, are going to directly contract with surgery, radiology imaging, they're going to direct contract with pharmacy, they're going to direct contract with specialists. And Walmart did that last year they saved a billion on a $4 billion health spend. That's called buried treasure in their health spend. That's literally 1174 stores. I didn't have to open the next year because they were able to equivocate that with bottom line.
Mark 46:34
So what exactly do they do?
Ron 48:10
They direct contracted with what they call Centers of Excellence. And by the way, they're not alone Caterpillar did it. Dozens of Fortune 100s are doing it. And hundreds if not thousands, of smaller companies are direct contracting in there. So they're saying no more middlemen, no more administrative bloat. We don't really need Cigna anymore. We're going to now go direct and contract with our benefit advisor to get onboarded with direct relationships with everybody that we need to go see in this and rebuild basically an insurance product without the insurance middlemen.
Mark 48:41
So does Walmart in that case, become the concierge and can aggregate all those services and they marshal it?
Ron 48:47
Without getting too complex in words that we don't care about like TPA, they basically steer the patient into the correct place. So you can go get your radiology over here and pay extra for or you can go with us, we'll pay for it all. You can go with this surgery center and you can pay for extra for it with your favorite hip surgeon, or we'll send you to one that actually has much better outcomes, lower infection rates and we'll pay for it all. So they kind of become their own EPO.
Mark 49:12
Well they're steering, they're navigators. So think of think of healthcare like a giant healthcare maze of corn. It's like a cornfield maze. And you got a guy with a chainsaw chasing you and he's going after your pocket. And he - and there's millions of financial traps in that cornfield. That's what healthcare has become today. People don't know how to navigate it but what Walmart has done is they've taken all the navigation out. Hey, the guy with the saw is back at that corner the traps around here, here's the path to get to the end and exit healthy and with your money intact. So is the is the biggest threat to getting this fixed insurance company interest?
Ron 49:44
The biggest threat is a bureaucratic system that requires sick care to survive. So why can't the insurance companies - it's the system we created. We birthed a giant it's kind of - well, the [inaudible] is much higher valued over the over outcomes. It's really that simple. There's just hundreds if not thousands of examples. Why can't the BUCAHs cut back 35% of their staff when they have 35% less premium because now they can't charge. Their whole model is based on growing not shrinking. So they can't even think about cutting staff. It's like unthinkable. You're - literally hospitals are cutting back 25, 30, 50 percent of their staff in smaller areas. You'll never see an insurance company cut back.
Mark 50:28
Well, what does an insurance company just insert DPC or something like that and just cut out the rest of the employees -
Ron 50:35
Who does primary care threaten if people are getting less diabetes like they do with Wellsmith, who's threatened by that? If there's less diabetics, you have less heads in beds, that's hospitals that lose. You have the renal treatment centers and kidney treatment centers of everybody who's getting off of renal failure. If hypertension is going away, you have less people using the insurance product because they're spending less the -
Mark 50:59
So do you think the economic incentives are just scattered in the wrong direction and all -
Ron 51:03
You can call the insurance incentives are perverse the hospital incentives are perverse. Actually the primary care for the present is incentives with fee for service have been perverse. come in and do the 16 step Texas dance instead of one or two step for 85% of visits. You don't need to go into the doctor's office. But most importantly, family practice is a great example. They can diagnose 97 and a half percent of all the disease states in America not the exotic you know, jungle fevers, but they can do most of what needs to be evaluated. So good family doctor is the frontline of defense to save all that money downstream. What do you want your family doctors to do? If they're all independent, they're not going to refer to expensive hospitals. So think of care like this. You Mark and your lovely wife can go buy a coke right now at a grocery store for how much 25 cents for can 10 cents for can.
Mark 51:55
I thought it was a dollar, I don't buy coke.
Ron 51:56
So I don't either but let's let's say 25 cents a can. What would you pay at the corner store? Maybe double, maybe triple. So what would you pay if you went to a white tablecloth restaurant? Maybe four or five times even more than that double? So maybe eight or 10 times? And what would you pay in a movie theater for Quasi coke that isn't even real coke. Maybe six bucks, so you go for 25 to 50 cents to six bucks, 10 bucks for a drink. And it's not even a real drink. That's what healthcare in America is. Where you go for the place of service for your care is super important. If your wife, instead of a psychotherapy, is she a psychotherapist or psychiatrists?
Mark 51:57
Speech Pathologist
Ron 51:58
A pith pathologith? Okay, so she's - No, [inaudible] I kept saying. you're a pith pathologith? I know a lot of pith pathologiths. That's - the bad. If your wife were a medical doctor that did family practice and your kids, your beautiful child you just had wanted to Coke she would not send them to the other three locations, should send to the grocery store. And it's like that for all foods, like all drinks, you're not gonna buy popcorn at the movie theater, if you can sneak it in for 1/20th of the cost, right? I mean, I'm not advocating, you know, robbing from the movie theatre. But I'm also saying, you know, come on. So healthcare is exactly the same thing. If you know the place of service, you're going to go for the cheapest. Well, if you work for the system, and you're a doctor that now works for that hospital, which 70% now work for big systems or private equity groups, you're going to refer to the most expensive place because you're getting tapped on the shoulder if you don't. So that's why independent physicians that are just cratering right now are so critical because not only lower infection rates, lower burnout rates, better, less medical errors, that they're not referring in to the Coca Cola that's at the movie theater. They're referring to the Coca Cola at the HDB.
Mark 52:39
Speech Pathologist So that's interesting. So one of my clients is one of the largest independent optometrist franchises in the world and their whole foundation of what drives them is that they believe that the very best eye care comes from independent optometrists. And that's their belief. They come from that background. And it sounds very similar here, you're saying that if we could put individual independent healthcare workers out there, that is the best.
Ron 54:18
It's not - so there's data and there's opinion, you know, you and I have clearings in our, in our EO process and when you have a clearing, the data is this which 12 independent jurors can all agree to this. My opinion however, the story and makeup is this. And that's, that's the coloration that we see of that data. The data is independent physicians, whether they're optometrist or schmoptometrists all have lower costs because systems get to charge 2x 4x 8x 10x they literally get to code and a double, quadruple or eight times higher rate. And I'll call it infinity x because sometimes you can have a surprise bill and I - the anesthesiologist wasn't a network and now he's infinity. So Medical bankruptcy is by far the largest
Mark 55:01
or not there. How many people have an EOB? They're like, you know, that person never actually even showed up? Well, how do you bill me that? So it literally is infinitity -
Ron 55:08
It was kind of on the frontlines is what we were talking about in the news until this came. And now we're talking about this system, you know, the pier is falling into the ocean. So with what happens with independence, they can't, they literally cannot charge to that level. They can't, by law charge through 4-8x. Well, you don't care, your insurance company's paying the premium your health, your employers paying the premium. They don't fight it, because they don't know that place of services actually matters that the restaurant is different from the grocery store. They don't actually have a view into that and some of the urgent care centers that are owned by hospitals that can charge double with an urgent care of the center that's owned independently. There's no designation on the side that says this is a pricey Urgent Care versus a wholesale urgent care. There's literally nothing for the consumer to know that. That's why I like having a doctor in your pocket. I call this The virtual care model or the direct primary care model, that doctors in your pocket, you pull out your cell phone, I need to get an X ray. You know, the hospital says I should get it right here right now. Well, if it's a sprain, it can wait till tomorrow. There's 10 locations within five miles of you that are like 1/10th the cost hold off on that X ray.
Mark 55:26
Well, I'll tell you, I've had the I think the curtain came down on health care for me. And why I think that's so important. I like probably a lot of people had - you talk about trusted you started this the most most trusted professions in the country, possibly in the world, are doctors, the white coat meant everything. And if I show up, and it's a Dr. Smith, Doctor, whatever that means that what's about to come out of your mouth is sacred and true and scientifically, validated implicitly. I have had a lot more exposure with some very specific conditions that have caused me to have to ask harder questions and become more educated on the situation. And what I found out is the doctors, you know what? They turn out to be human beings. I didn't know that. And it's and it's really scared me because there is this all of this system that we're describing is and and that presumption of preeminence and knowledge has created an insulation. And there's a lot of stuff you need to know. And you need to be able to ask questions. And it's not easy.I mean, even me knowing urgently when I get to a situation and a doctor gives me an opinion. It's not like that easy for me to challenge it and get multiple perspectives and be able to ask better and better questions in a situation that really matters to me. And if you can get that doctor in your pocket that you do trust that you have a more transparent relationship with which I guess is not implicit. You can be empowered, empowered to do that. So you know, I guess my question is that being How do you get that transparency is that an -
Ron 57:55
Do you know why the CSI shows are so popular? The Crime Scene Investigation shows? They start out with one and then there's multiple shows now. And, you know, by that, I mean, that was such a big franchise because we like to sit there and figure out who done it. What happened here, what is going on with this crime scene. And that's exactly what a doctor does with every interesting case that walks in the door. So of my son is a gastro and fellowship his first year. And a GI doctor has pretty much boring routing and plumbing jobs to do. But what there's one case out of 20 that are super interesting. So my opening question with him is always, hey, what was your cool case this week, and he's got something super interesting. And they had to CSI the problem, you know, and that's what they're doing their crime scene investigating that human body with Super 120 different tissues and systems. And he got to know a little bit about everything, and you got to figure it out, you know, and so, we now have 120 specialists that that doctor might refer to. Well, my English teacher, we were doing a gratitude exercise at dinner a couple of weeks ago. Who would you call right now if you want to tell somebody how much you loved him how much they meant to you haven't talked to in decades. Called my English teacher, hey John. Every time I write, you know I wrote a book called healthcare is fixed. Every time I write in the morning when I'm blogging on LinkedIn, or every time I'm writing prepare for, I'm having Mark Leary on my show, and I'm writing a prep for that show and an introduction. Every time I write, I think of you, John Tremble because I want to tighten and brighten. And I think about how much I love that class and how much I enjoyed getting to know you. And he said, I said, how you doing? John, I'm talk to you in 40 years, because I'm not well run, because I'm 79. And he started giving me this condition and I go, God, you're like the bundle of energy. I can't imagine you not a bright, strange shining comedy, because, well, here's what's going on. And I said, You know, I don't I'm not a doctor, but I have a functional medicine doctor, I'd like to introduce you to and I'm gonna have this guy call you tomorrow morning. But here's what I think you have based on what I know, as an amateur CSI that, you know, I'm not a doctor, but I just play one on podcast. I would like you to to have this doctor ask you about adrenal failure and your adrenal fatigue. I think you have adrenal you have classic, Google it right now. You classic adrenal fatigue. He looks it up he goes, yep, yep, yep, yep. Wow. And he goes, What do I do for this? I said, you talk to the doctor because I'm not a doctor and then you go get this whole food supplement. And here's the brand that I would recommend based on what worked for my friend and his daughter who had it as a champion bicyclist. He texted me, like every day this week Ron, I'm getting that - oh my god, you know, magic. I went to four doctors in Colorado Springs, none of them could figure this thing out. I didn't test positive for any traditional adrenal fatigue symptoms. But you CSI'd me better than the CSI CSI'd me well, that - okay, so this is my ego being proud of something I did. I haven't done anything like that in 40 years, by the way, but it's fun to see CSI. I think that's my point. A great doctor is that has time like direct primary care whose only six patients a day has time to do the research and the CSI and they're not going on Google to figure it out. They're going into medical sources to get the data of what this symptom, symptomology or this we'll call this a recipe for disaster this is adding up to because sometimes -
Mark 61:04
Well you say - you said that CSI thing, like they're all that way, and I'm like bullshit. Like, I don't know how many there are, but it's not all of them. Is it 50%? Is it 80%? Is it 20%? And are you saying the DPC creates a much higher propensity to create those -
Ron 61:18
It creates frictionless movement for the doctor, think about the doctor that have to see 25 a day, take that into eight hours, they're not getting to urinate very frequently, and if so, they're not gonna drink a lot of water.And if so, they're not gonna take any breaks to talk to their wife. And so they're not getting to check in with their girlfriend on the side. And if so, they're not getting a chance to check on their kids' school performance. I mean, they literally have no life. Their life has been condensed to typing into a computer and looking as possible as they can over their left shoulder. And during an exam, they don't have the intense of - the freedom.
Mark 61:27
They got to be driven by volume. The most important position in that office is the -
Ron 61:55
They're not the CSI, they're the front desk at the CSI answering telephones, that's what they become as secretary. So, administrative people that is not fair for somebody with $250,000 in debt. They went to work for three years in a residency to earn less than the janitor earns at that hospital for the privilege of helping us CSI our health and, and the most intense moments of our life. These people are so dedicated, and they're so excited about their profession, until they get in and become these clerks. And so I'm not blaming the doctor, I'm blaming the whole billing and coding system that's really extraneous. Now that we have direct contracting, is the problem. And once we get the administrative out of the way, which is going to take many years, and once these insurance companies get into the another 45% increase that they're expecting this year, oh my gosh, I can't imagine the unhealthy people are gonna want to stay with insurance. If they go from 5000 to 7000. 5000's already straining their budgets now they're going to go another 2000 that they don't have. No, I see a lot of young healthy people dropping out of their insurance company plan and finding these virtual models and these direct models and becoming a customer outside of their company insurance. That's what I see happening. And I don't see that that's good for insurance companies, because in Australia, that's exactly what happened. And when the young healthy leave, then the next, less healthy population drops out. And then, it's like onion skin, it just starts peeling off by healthy layer by healthy layer. And what's left behind is the unhealthy, sick older people. And that's called the death spiral. So we've seen eagles, you know, they grab claws, and then they fall into it while they're making love into the ground. But they separate right before they hit the ground. That's a death spiral. Insurance companies in Australia are in a death spiral because they overplayed their hand. And I'm afraid American insurance companies are about to overplay their hand this year.
Mark 63:41
So, okay, so insurance fits into the model, but it is not the model. In terms of you have probably different way to describe this. I've thought of this as there's three layers of health care at your primary care, which is who you call, when you don't know like the first call. It's always the first call. Then you got specialists which are like, Oh, it's something serious and you need somebody who can do that kind of work. And then you've got catastrophic, which is like the money part of this conversation that is like, Oh, it's cancer, or it's major surgery. And catastrophic is basically an insurance domain that I've not seen anybody get out of. The first two are plausibly affordable, out of pocket, plausibly, and it's a debate right? So the specialty care can get expensive, but the no one sort of asserts that, like, yeah, I'm happy to pay for cancer treatment. Like that's not what most people think of. How does that - how do you tease that out? Because you can for 50 bucks a month you can - somebody who's well to do or middle class who have 50 bucks a month, no problem. I'm not changing anything. But that insurance question is a whole other question. How are you addressing that question?
Ron 64:44
Well, there's two game plans. If you're not self insured, if you're a small company like me, you hire a company out of Boston called Sedara. So there is a sharing plan like liberty, liberty, liberty, you hear those ads? They're a sharing plan, cost sharing plan and all the members say, you know what? Mark needs a hip replacement, we're all going to pay for that hip replacement because it's way catastrophic for what he can afford. So there's that. Sedera has a sharing model, where the, again, the younger, healthier taking care of those that need something immediately. And some of them are faith based and some of them are not. But it's there.
Mark 65:16
Now, but isn't that program, it's the the healthcare program. They were grandfathered in, as, as I understand it, correct me again, it when Obamacare was coming into play, they just sort of closed the door, if you were pre existing, you can stay. So it was a small number of captive health shares out there. Is that scalable into the future and of the laws changing? Or how's that work?
Ron 65:36
There's this fastest growing company country, fastest growing city in the fastest growing state. And the fastest growing company in that fastest growing city is called Sedera health. So I'll argue that they're doing just -
Mark 65:47
Can you have more Sedera health and health shareare? Can you create one today?
Ron 65:51
They di after so yes, the answer is yes. They morphed into something else. But so the other thing is if you're self insured, and you have, let's say, 200, 500 a thousand employees, you'll hire a company like Berkshire Hathaway and you'll say you know what, I want to risk up to a million dollars of my healthcare expenses I'm willing to pay but anything over that penny over a million I want to stop loss coverage, I want to stop the the pain and I want you to pick me up the loss above a million. So they can do that by employee, I'll take on 50,000 per employee or they can say I'm gonna take a million dollars off the table myself and the rest is you Berkshire Hathaway. And they charge a premium and it's a couple hundred bucks an employee and the insurance company and the employer who's now basically you know, Mark Leary insurance is now taking that risk on themselves for that million dollars. Well -
Mark 66:36
but you're in sourcing that. You got to own that. That does not sound appealing to most to 5-10 million dollar companies - What are the smallest companies right now? What's the smallest company that makes sense -
Ron 66:41
They're all doing it now that - it's going downstream. So the 80% of the thousand plus employees are doing what's called direct contracting with these types of contracts that are essentially self insurance that's going smaller and smaller and smaller downstream. There's a whole industry being created called Captoves. Captives is like, hey, join the frat, we're gonna save you the cost by - we're all going to become basically a network and we're gonna we're also going to create our own little network and we're going to fund each other and take the risk on ourselves. Because you may have a lot of older employees, but I may have a lot of smokers, and this guy may have a lot of drywallers that hurt their back a lot. So we're just going to pool our risk together and we're going to all self insure directly contract with the hospitals with them imaging with the labs, with the specialist, with the primary care, and we're going to get our costs way, way down. And the cost can drop 30 to 40%. The first year with the low hanging fruit that's pharmacy, primary care and imaging. Those are three real low hanging fruit we can shave 30% off by joining a captive or self insuring. And there's still again, there's a 20% I talked to a company this week. They have 250 million in EBITA. They're a big company. They are not self insured. That's like really? There's still some left out there but 20% of all the big companies in America are not going to this obvious solution. So then what they're not saying is that they have buried -treeasure like Walmart found in their EBITA and - You can do five, you can literally I'll give you the name of somebody.
Mark 68:14
5 million?
Ron 68:14
5 people. You don't have to have a lot of people to self insure you can join a captive -
Mark 68:19
How much capital is that cost? I mean, right now everybody's probably cash is king, like i'd outsource anything -
Ron 68:23
Well, let's let's say 30% of less is less right? I mean, 40% of less is less. So whatever it was costing you before that you can make the insurance go away and have nothing but you can also join a captive and you can save a lot. So I can, again, in the show notes give you the name of somebody who can set that up for you.
Mark 68:30
Yeah, let's do that. Okay. Well, man, what else is on your mind?
Ron 68:47
Healthcare is Fixed is a book that I have an audio version now. It'll be coming out in the next 30 days. And essentially what the book is about is everything we've been talking about Mark is there's a lot of navigation and confusion and pain out there, and healthcare to fix gives a simple solution that I've been using for the last two years. I have now my retention is I have literally no turnover for the first time in my career because I had free premium, no premium, no co-pay, no deductible health care for my employees. I had no - hardly any absenteeism, it got cut in half because they don't have to go get their kid's pinkeye handled it some Medicaid clinic. I had to hire four people in January and normally takes me 60 to 80 interviews and I found four people in five interviews. We cancelled all the interviews after five. I've never find five eight for a players and five interviews. It was because we have free healthcare. That was our opening in our hiring paragraph free health care. Well, that attracted [inaudible]. So what I've learned in this, I've put in this book, redirect health is the company I use, and I'm telling the story of what it's like to be a patient, what it's like to be a customer or the first employer in Texas and what it's like to be a doctor in that world, because I've interviewed their people. So I think it's the healthcare of the future. I'm paying $105 a month for my employees to participate. That's a lot less than the five or 600 that I was getting quoted by the BUCAHs and I'm getting much better care.
Mark 70:14
Even 500 is not bad. I mean, depending on what you're doing. So that's it. That's I mean, I've you know, 7, 8, 9 hundred bucks and then by the time you get family involved, you know, 10, 12, 13 1500 dollars a month I've seen fairly pretty.
Ron 70:27
Definitely families, but for individuals it might be a blast I interviewed a drywall contractor who is their first guy in Arizona that took a big risk. He has one of the top 10 drywallers in the country. So what he does is he builds for the big home builders, everybody recognizes the name of in Nevada and Arizona. His workers comp premium got dropped in less than half because they cannot go to a chiropractor for free. That's part of the plan with Redirect. They can now go get their doctor to visit them for free so they don't they're not on workers comp they were at 3 million hours with no interrupted injuries for the first time in their 50 year careers and 53 years career as a company, there's three generations. So PJD, drywall, Paul Johnson drywall has not only reduce millions and their workers comp claims, but their health insurance premiums dropped by millions as well. I said, would you ever go back to BUCAH land and he says, I can't even dream of that. It's life is so good right now. With what did you do with the savings of those millions of dollars? Did he go buy a Montana ranch? No. He now gives community college assistance. If they want to go to school, he'll pay for their schooling. If they want their kids to go to college, you'll pay for that. If they want to take a day off, he'll pay for that. Drywallers don't get those kind of benefits. And it happens on day one. And the president of the company has the same exact benefits is the brand new drywaller who just started so now they can attract the best craftsmen. They have the best benefit plan by far in the industry. Nobody can touch them. And what did he do? He uses health spend to not only reduce his worker injury rate, but he would use it to reduce the absenteeism sick, and the premiums that they were putting in. So they all got a raise because they don't have to put that 400. But what does a raise to somebody that makes 35,000? If it's 400 a month, that's a significant raise, because it's all bottom line, right? That's like a 7500 raise if they're making 5000 more. So that's what he gave them. So he's not - there's a company called Rosen Hotels. And my next book is going to be about Rosen Hotels. Have you ever heard about these guys? No Rosen Care was born in 1991 when Harris Rosen and he now has 6000 employees and 6000 rooms in his hotels are all around the Orlando Convention Center. The neighborhood behind them Tangelo Park is one of the worst neighborhoods like it'd be like Sharpstown here in Houston. It's one of the worst neighborhoods and just gangs, crime ridden, and he decided to take the savings he found by direct contracting with primary care into the neighborhood. He will - he agreed to pay for every one of the high school graduate's kids college full-boat scholarship, like full-boat. Guess what the graduation rate went to in that high school that was at 35%? 100%. They have hope. I mean, college pay for private or public school paid for, what? And they had early reading programs. And then they told all their employees, if you go get primary care, we're going to be it on our clock, it's we're going to pay for that as if you're working. And your premium is $100 a month instead of this ridiculous amount and your co-pay is $5 instead of sume ridiculous $75. And what they created is 430 million dollars to their bottom line since 91. And they poured the vast majority of that into not only this neighborhood now they're taking care of the school employees, the teachers and the administrators. And now they adopted a new school district that's much bigger than Tangelo Park next to that. They're - their retention rate. So my family started in the hotel industry and that's what put me through college. Our retention rate in hotel industry is about 75% turnover. Their retention rate in Orlando, Florida> Just guess.
Mark 72:29
75% retention?
Ron 73:16
They have - they should have 75% turnover, meaning, you know, every nine months people are leaving, they have 14% turnover. It's a fraction. Who wants to leave free health care? That's basically what they have free is health care. And now the wine - waiting to get in all those jobs that used to turn over heavily like maids and bartenders. There's a long line of people who want to work that are from the neighborhood that want to work at that place because they love Mr. Rosen, he paid for their college. So you can take the dividend that comes from this. We'll call it a peace dividend that comes from reinventing your health care, and making it now Mark Leary Care instead of BUCAH care, and you can pour it into the neighborhood and change the world or you can take in and help your company survive in these scary times. So this company was like 250 million, even though we calculated we'll be able to save about 25 million year one. That's not a big part of 250 million EBITA, but that's more than a month. No, that's more than a month. They don't have to go sell that many more of their equipment. So yeah, we're opening up discussions with people, not just with savings, but we're now going to get sensors in your home. And we're going to know where the whales swim.
Mark 75:13
That's incredible, man. Look, we've covered a lot. And there's a ton in here. This is the kind of dense material i'll have to listen to twice to get everything out of it. To wrap us up, what is your passionate plea to entrepreneurs right now?
Ron 75:34
You got a lot of blessings to be counting. You got a lot to be thankful for. 99% of the world would trade positions with you right now. as scary as your outlook looks, as fearful as you are right now. 99% of world would trade spots with you right now. Be thankful.
Mark 75:53
That's so awesome. Ron, thank you so much. It's been a great exploration and talk about health care, I mean, so and this is going to such a good thing for people who really want to geek out on this as well as want to make - get some control over the ridiculous spend and the problem that healthcare is in trying to run a business. So thanks so much, man. I really look forward to our next chat and we'll see you next time on You're doing it wrong with Mark Henderson Leary. Thank you so much.