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EP73 - Virtual Healthcare: Reducing Costs and Improving Outcomes with Kirat Kharode

Trisha’s guest this week is Kirat Kharode, JD, FACHE, Co-founder of HealCo – a virtual healthcare marketplace based out of Jersey City, NJ.  Telemedicine and virtual healthcare marketplaces are now part of healthcare delivery, and this interview will help those of us in healthcare and involved in medical properties understand how to integrate with this model to work together, to treat more patients with the goal of improving healthcare outcomes, and reducing the cost of care.

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In this episode, we talk about…

[2:21] HealCo and the health system without walls

HealCo is an impact-oriented marketplace platform, and it was launched shortly before the COVID-19 pandemic. They are building a health system without walls in New Jersey, to deliver a collective of benefits for employees, self-funded employers, and at-risk populations. The goal is to lower the longitudinal costs of healthcare by integrating auxiliary services like pharmacies, mental therapy, dietitians, and medically tailored food prep companies, to augment the traditional brick and mortar physician office visit experience.

Virtual options such as HealCo can work together alongside more traditional options. The spark behind starting HealCo was to create a marketplace for physicians and auxiliary providers to physically meet. A 2019 article in Forbes dubbed them a sort of Airbnb for the medical space.

Kirat’s background in healthcare leadership administration and planning allowed him to focus not so much on the real estate, and more on the fact that these groups of providers needed to come together. It was interesting to see who wanted who wanted to work with whom, who could add value to patients, and who might be a synergistic addition to certain practices.


[4:30] Focusing on primary care services

HealCo is more primary care oriented, to start. In the health system without walls, the internal medicine experts are currently primary care physicians and OBGYNs and the auxiliary providers are therapists and pharmacists.  They do see that evolving in the future, and they also plan to add dietitians to the auxiliary providers. If a patient needs to be examined by a physician, HealCo is able to partner with local physicians specializing in internal medicine and OBGYNs. It could absolutely be the same person they are consulting with on the platform.


[5:47] Partnering with physicians

As they continue to build out the platform, partnering with physicians will continue to be an integral part of their success. When a physician is working in their local practice, often care coordination has to happen where a patient needs to be referred – whether it be for therapy, for medication management, or for other specialty care.  Although the patient needs it, the physician cannot guarantee the patient will be able to do those things.

HealCo works with the physicians to integrate those services into their offices, by allowing their patients to connect with these auxiliary providers either while they are in the office or after they leave.  Their patients can consult with a licensed psychologist in New Jersey, or communicate with a pharmacist about medication adherence. It allows for an integrated, hybrid approach that partners with the brick and mortar experience.


[7:11] Creating efficiencies and alleviating wait times

From day one, Kirat’s mission for HealCo has been to create access to health and wellness services for those that need it the most. JAMA published a study a couple of years ago stating that it takes the average patient 87 minutes to visit a physician for an appointment where they get to spend less than 15 minutes with the actual doctor. That does not include time afterwards to get their medication or to see an auxiliary provider or specialist.

The health system without walls is revolutionary because it aims to bring all those resources under one digital roof. Patients can be seen quickly by high-quality providers at a reasonable cost. This hope is that this system will ultimately lead to better outcomes because there is a higher likelihood that patients will, in fact, see these other providers or get their medications.

These social determinants of health can have a huge impact on certain populations. They have to work late, or they can’t afford medications or specialist visits. Through HealCo’s online system, they can pay a lower cost and access other programs that will improve their health. 


[8:48] Geographic aspirations for HealCo

Right now, HealCo is just focused in New Jersey. They are a seed stage company, and Kirat is based in New Jersey.  They first want to launch their minimum viable product within their collective in New Jersey, which is where they are focused currently with direct to consumer offerings and soon employee benefits and pop health products. 

Prior to COVID-19 they had provider facing products as well, such as what was described earlier with physicians and auxiliary providers sharing space organically. That idea has grown to about six other states at this time, because through word of mouth and people wanting to list their spaces, they were able to offer that product to support physicians and specialists meeting one another. It is not, however, a core part of their pop health offering at this time.


[9:51] Kirat’s outlook for the spectrum of healthcare services in the future

In the future, Kirat sees partnerships with employers and municipalities as being HealCo’s biggest impactful work.  These partnerships would be a way for them to work on driving down the cost of care and improving healthcare outcomes over time.  

With the health system without walls, they can tackle major problems such as reversing type two diabetes. This work would involve all of their existing collective of providers: physicians, therapists, pharmacists, dietitians, and ultimately medically tailored food prep companies.

Kirat would also like to lower costs, and there are a couple of ways to go about this. From a pure cash based perspective, HealCo will offer a price match or price beat guarantee. If the patient can get a drug online and delivered at a lower price, they will beat that price.  It hasn’t happened yet, but when it does, it will give them a chance to renegotiate with their suppliers.  With employers and pop health vertical, the name of the game is keeping people out of the hospitals. With chronic conditions, such as type two diabetes, the likelihood of those downstream costs increases. If HealCo can make preventative care a fundamental part of the equation and monitor the biometrics over time, Kirat is certain they can make an impact on overall costs. 

As far as virtual care, Kirat sees it as a much more integrated hybrid experience in the future. The idea that you can incorporate other specialties into your practice is beneficial for all parties. Some specialists are very in demand, but also rare in certain parts of the country. For example, there may only be a handful of pediatric specialists in a given area, but if you could scale that person up and they could sit in their office and see 30 patients a day, rather than driving around to 10 different hospitals, they would be happier and the patients would be happier as well.  

There is always an aspect of needing to be seen by a doctor, but if you have a pediatrician on the other end who can do any physical manipulations or whatever needs to be done while the person is there, there is no reason why the specialist or auxiliary provider can’t be scaled up as part of those office visits within a brick and mortar practice. 

A big shift during the pandemic is that many therapists are practicing online right now. Each therapist has a panel of maybe 30-40 patients in a week, so they don’t have a lot of capacity to take on new clients. Kirat sees that we really need to leverage brick and mortar locations. The ability to scale up so that you have your physical locations, but also have a component where you’re building out telemedicine within that suite, would be really impactful over time.


[14:02] How Kirat sees healthcare policy and regulation affecting HealCo’s operation

Kirat went to law school at night while working at Children’s Hospital of Philadelphia, so he has always thought about regulations, Stark Law, and anti-kickback statutes as being kind of cumbersome and difficult when it comes to deals being done between hospitals and doctors – or potentially even physician referral sources between each other.

Starting in 2016, Stark and anti-kickback seemed to unravel a bit.  In 2018, there was additional guidance stating that they were going to revamp these laws that had originated in the 1980s. In the ‘80s, doctors were really living the high life. They were getting cruises from pharmaceutical companies and things like that. The reason Stark Law was changed was because the government realized that there was a desire to move toward value-based care and away from fee-for-service.  Unfortunately, a lot of these laws from the ‘80s were restrictive even to legitimate things being done to deliver quality care.

A couple of years before Kirat started HealCo, he was really considering these laws.  Changes were supposed to be announced toward the end of 2019, and the finalized laws were passed in December 2020.  Stark Law has now created a framework for a value-based enterprise, so this is how HealCo’s health system without walls has been designed and built. That means that a digital company can come up with value-based criteria where if there is a substantial enough downside risk to the parties involved, you can have quality metrics in your monitoring and share in profits.

That is important to the business because whether you are physically sharing spaces with other providers or whether you are integrating with other providers asynchronously, there is an opportunity to look at indicators such as H1AC, glucose levels, BMI, and a range of other things proven to drive down the long-term cost of care.  If you can do that with a collective of providers, like HealCo does under their digital umbrella, then you are able to share in the cost savings that might happen.  Telehealth regulations are changing, but due to the impact of the pandemic Kirat thinks that telemedicine is here to stay.


[17:13] Attracting clinicians to HealCo’s marketplace

HealCo still offers the space sharing platform, and it has been a valuable way for the thousands of providers in their network to connect. If they need a resource, or if they are looking for spaces in different markets, they have a central place to go.  When they were actually executing leases, which they do not currently do through their platform, they had about 30 leases in the first six months. Right before COVID, many of them broke their leases and got out, but that is initially how they attracted providers and started having a lot of conversations with physicians and therapists about what the world was moving to. Especially with therapy, there has been a clear trend of people abandoning physical spaces and moving into a teletherapy model.  Since they are currently focused in New Jersey, a lot of those conversations led to word of mouth referrals as well.


[18:45] Partnering with hospitals, employers, and pharmacies

For self-funded employers, like many hospital systems, the benefit of lowering the cost of care and improving the health of your employee population has financial dividends. Kirat imagines that a lot of what HealCo is trying to do may be far too disruptive for hospitals. He views them as the “anti-hospital” in many regards, in terms of trying to prevent people from going to the emergency room or being hospitalized. If you believe hospitals’ marketing, they believe fundamentally in the same thing. In theory, they should be aligned on that front.

HealCo also works with independent pharmacies. They are learning who works with them best and who can come up with competitive rates and good delivery services. They look at their network of independent pharmacies in the area and build their supply of drugs through that. Ultimately, they want to have 1099 contractors and employees that are pharmacists and therapists who focus on diet, diabetes, and nutrition as they evolve more into the employer and municipal pop health space.

In his conversations with physicians of several different specialties, Kirat has asked how many people talk to them about nutrition, obesity, or diabetes.  The answer is about 80%.  It’s clear that people want a solution, but they may want something as easy as a pill. What HealCo aspires to do is to give these digital health prescriptions over time that any physician can carry out with support from auxiliary providers.

In the case of the Native American population, for example, being able to work with physicians in reservations will allow an in-depth cultural understanding while also providing access to providers that may not be available in that community.  Broadband capability has to be in place, of course, but the opportunities are huge for underserved communities.


[22:53] Team-based approach to holistic preventative healthcare

 A lot of people are finding it a challenge to access holistic preventative healthcare right now. It truly takes a team-based approach, and it takes that monitoring. As HealCo evolves, Kirat would love to see remote patient monitoring, continuous glucose monitoring, and those types of things to make it easy for people to engage in this process.

Alignment between hospitals and physicians can certainly be lacking. As it relates to patient outcomes, Kirat sees that financial incentives have to be aligned throughout – including the employee, the employer, the physician team, and whatever overhead costs are needed to support the technology. Cash is a great motivator, and if you can get a return based on positive outcomes, that’s great.


[26:10] Kirat’s first jobs

When Kirat was 12 years old, he convinced his parents to let him walk about a mile and a half from their house, as a local lawyer in town allowed him to work with him and file papers. His next job was unpaid, but it was for college credit. He convinced the university to give him some credits for working at a coroner’s office during the summer.  This was where he got his start from a public health perspective.


[28:06] What Kirat would do for a living if he was not in the healthcare industry

If Kirat was not in the healthcare industry, he would want to be the general manager of the New York Mets. Kirat is a huge fan, and he and his wife had good seats at the 9/11 game. He had the opportunity to interact with the owner of the Mets, and Kirat offered to be his GM. He didn’t take him up on it, but the offer still stands.  


[29:05] What Kirat is reading or listening to right now for news, information, or inspiration

Kirat really enjoys reading into public health research, and there is a lot going on right now with physician fee for service changes with Medicare. He is also digging into research related to food as medicine.

Kirat has never been a fiction reader, but he does find podcasts to be tremendously helpful as well. Kirat says he was never a podcast person until he started his own company, and now listening to podcasts is an important part of his day to take in the research that is out there in multiple forms.


[33:38] The dangers involved in medication management and compliance

With the food as medicine research, Kirat hopes SNAP benefits and food stamps can align with this sort of mentality. There is a big opportunity to tie in and prioritize diet over actual medicine consumption.  Thinking about things in a preventative way rather than a downstream way is important, and employers are focused on this as well. Taking pills indefinitely is not a great solution, and often people end up having to take other pills because of the side effects of their original pills, and so on.

There are 150,000-175,000 deaths every year because of medication compliance issues.  We have a disjointed system with so many different doctors that could be involved in care. The internal medicine physician is often not that central coach, and people are changing medications.  Then they get into emergency situations, because nobody was taking a holistic approach and looking at the whole patient.


[35:56] Chronic health conditions

When you go into a doctor’s office, usually the first questions they ask center around what you are eating, how you are sleeping, what your stress management is like, and if you are getting physical activity. These are four things that you can largely control yourself, as the patient. With 6 out of 10 Americans having chronic conditions with co-morbidities, there are a lot of people whose eating, sleeping, stress management, and physical activity are both impacting and being impacted by their health issues.  These numbers will only increase over time, unless there is a sea change in terms of what we do as a society and what we prioritize.  


[36:57] What Kirat does for healthy self-care

Kirat tries to work out daily, and meal prep is also key for him and his family. He also meditates daily, even if it’s only for a minute. He engages in intermittent fasting, and he gets out on walks daily as well.


[38:34] Kirat’s thoughts on whether leaders are born or trained

While there are skills within leaders that can be trained, Kirat also thinks there is an innate leadership ability that one is born with. Certain fundamentals make you more prone toward leadership, and you can hone your skills over time.

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