The Value-Based Healthcare Podcast: Anthony Coletta

Welcome to episode 22 of The Value-Based Healthcare podcast.  Our guest today is Dr. Anthony Coletta, founder of Tandigm Health. Tandigm Health is a population health and physician management services organization which has partnered with more than 1,400 primary care and specialty physicians in the care of over 115,000 patients. Listen to what Dr. Coletta has to say about maintaining company culture during the COVID-19 pandemic, his career journey, the digital engagement of patients and more.

Click play below to listen to the entire podcast. Scroll down to read the transcription. 

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Podcast transcription: 

Introduction:
Welcome to Reveleer Value-Based Healthcare Podcast. In every episode, we discuss healthcare technology, innovation, and current events, presenting interviews with the thought leaders from a variety of disciplines of healthcare. Don't miss any episode by subscribing to the series via reveleer.com. And now here's our host, Jay Ackerman, introducing today's guest.

Jay Ackerman:
I'm thrilled today to be joined by Dr. Anthony Coletta.

Anthony Coletta:
Good morning, Jay. How are you?

Jay Ackerman:
I'm doing great, Tony. Thanks. So first a little background on Tony. Tony is the chairman of the board of Tandigm Health, a population health and physician management services organization with revenues exceeding $800 million. Tandigm Health acts as a positive disruptor in the movement towards value-based healthcare by partnering with more than 1,400 primary care and specialty physicians in the care of over 115,000 patients. Dr. Coletta's vision is to restore and maintain balance within our healthcare ecosystem, placing patients and their physicians at the epicenter of proactive, coordinated care leading to ever improving outcomes, lower costs, and enhanced experiences for all. Let's get started with a little bit about how this COVID period has impacted the business and maybe how you and your executive team have responded. Maybe talk to us a little bit about what that has been like with shelter-in-place and how the teams responded to that challenge.

Anthony Coletta:
Sure, Jay. It's been certainly a very interesting time. I think the best way to think about it from Tandigm Health standpoint is you think of the company sort of in two buckets. It's clinical and clinical engagement side, and then the administrative and data analytical side because we've had to approach things differently in the two sides. Obviously, in March, in the Philadelphia area, we were one of the first companies to go completely off-site. So we work virtually. And if you look on the administrative side, the data analytics side, it lends itself a little bit better to daily Zoom meetings. And we're doing just about all the conventional companies are doing in that regard to stay connected and to try to keep your culture together. It's 200 employees in the company, so that's a little bit easier than think if you have 14,000. But the clinical side, it has been distinctly different.

We began a COVID related program specifically related to identifying our highest risk COVID patients. We have a big care management arm. We have doctors that go into nursing homes that help with our patients. We have nurse practitioners and nursing homes and patients' homes. So we started a COVID specific related program trying to keep as many of the patients who are either at risk for COVID or who had contracted COVID in their homes and away from the hospitals if at all possible. And so we instituted a very specific program to the highest risk patients. That got traction right away, putting pulse-oximeters and care kits in the mailboxes of Medicare Advantage patients and that sort of thing. And we continue with that program to this day. And then a final thing is we've got all these primary care practices. We have over 1,000 doctors in network, but 420 of them are primary care docs and they are mostly independent, relatively small. So we embarked upon programs to accelerate their anticipated quality payments, maintain their cash flow, do everything we could to try and help them migrate their way through this intense pressure on their small business.

Jay Ackerman:
Probably a great opportunity for them to see how the support from Tandigm and how the value-based care programs, having fees tied to quality, is actually a healthy and helpful part of their practice.

Anthony Coletta:
True. They saw right up front the difference in revenue related to capitation. We're owned by Independence Blue Cross, the health plan. They leaned in heavily as well in terms of some of the other things they could manage for the practices. Like even waiving copays for patients on telehealth visits, but paying the practices the difference in the copay anyway. Accelerating some of the accounts receivables. Because of the way this network of primary care doctors performs in a value-based environment, they are distinguishing themselves as part of the overall Independence Blue Cross network in Philadelphia. So IBC, the health plan, really was able to lean in as well. So I think them seeing that partnership, that's obviously in value-based world, at least my opinion is that it doesn't work without a true partnership, not just contractual relationships, but partnership. And for these docs to see the health plan and the subsidiary of the health plan like Tandigm really lean in to help maintain their practices and their businesses has developed a tremendous amount of political and trust related capital with primary care docs.

Jay Ackerman:
How about you specifically, anything you learned about yourself operating in this environment?

Anthony Coletta:
Yeah. I'm a surgeon. I'm a hands-on guy. So thank God I'm not actually the operating CEO of the company in the virtual environment. I'm not a virtual guy. I don't take well and easily to all of the electronic connectivity. That's me personally. I'm a surgeon at heart. And even when I went back to get my MBA, I hated taking my exams online because they never ended. You could research and research and research, and I think the same thing has happened. I'm a big culture person. I'm able to hands-on and view the culture at Tandigm Health which I founded based on patient is always at the center. People come in with a passion for the work that they do every day because they know that end of the day we're helping patients in the Philadelphia area. And that's difficult to maintain electronically. So I've learned that I'm not much of a Zoom guy. This Zoom is fine, Jay, but otherwise, I don't take to it very well. That's what I learned about myself personally.

Jay Ackerman:
Yeah. Totally understand that well. And I appreciate you being on this Zoom podcast with me. So let's maybe reel it back a little bit and help me understand your path into healthcare and being a doctor.

Anthony Coletta:
I go way back. I'm one of these lucky kids who by the time he was in first grade... And my father was a pathologist, but for whatever reason, the only thing I ever wanted to do is be a doctor. When I was asked by a college counselor, ‘What would I do if I didn't get into medical school?;- I stuttered. It never even came into my mind that would happen. And I was one of these lucky guys that all along the way it turned out to be just the right thing for me. The decisions that I made which were instinctive about becoming a surgeon and then being a general surgeon, not a highly specialized surgeon. I listened to what my heart and my instincts, where they were taking me.

And I had a very, very productive career, 25 years as a general surgeon predicated upon the fact that I was one of the first surgeons to do minimally invasive surgery in the United States. So I was out in practice five years, I had learned all the old techniques. And then suddenly I saw people doing surgeries with television monitors and tiny incisions. And having had all my training and five years of practice in the conventional way of doing things, I saw the advantage of this new technique and really seized upon it, learned it and became luckily enough, one of the early pioneers in minimally invasive surgery in the United States. And that transformed the way I looked at healthcare, transformed the way I looked at eventually my business career because so many people said it couldn't be done, and yet now it's the gold standard for a lot of operations.

The saying used to be, big surgeons make big incisions. And I'm like, well, I'm not 100% sure about that. And so that was transformative for me. And right in the midst of that, that led to the beginning of my business career. The 1990s managed care was just coming on the horizon, capitation. And it was apparent to me that if doctors didn't lean in, it was either be eaten, and that we needed to form organizations, put capital together and understand what this downstream risk meant for providers. This is in the 1990s. And began to build a network in the Philadelphia region that eventually became a pioneer ACO. There was no ACO at the time, but the premise being value-based care.

If you're going to lower the cost of care and improve the quality at the same time, both of which there's tremendous opportunity to do in the United States because of the costs and quality, the equation is upside down. That putting like-minded clinicians in the center of it and appropriately giving them right information and rewarding them appropriately, that they could do a better job than conventional managed care could in terms of cost and quality. And so in the 1990s, an outgrowth of my experience with the understanding that I could do new and different things was the beginning of my business career.

Jay Ackerman:
Interesting. You can see how those thoughts have probably carried through to the creation of Tandigm Health.

Anthony Coletta:
Not only our thoughts, but the relationships, right? So I'm 25 years in this market, practicing general surgery. So a lot of the primary care docs, referring patients to me to care for them and getting to know a lot of the quaternary academic institutions because I would refer patients for the more complicated procedures. As a general surgeon I didn't do many of the major surgeries. So I was very much ingrained in the provider community. And we put these early networks together in Philadelphia based on what we knew groups like the Hill Physician group and Brown & Toland and healthcare partners on the West Coast, where the doctors were several decades ahead in value-based care. They were taking all the downstream risk and managing the cost and quality very effectively using data and analytics. And so I built those relationships with primary... And I learned in the early work. I tried to make it multi-specialty at the outset, but the fact of the matter is that there was not enough money in the model early on to dramatically affect behavioral specialists.

But there is enough money, at the time, 10, 15, $20,000 a year, to a primary care doctor of additional money based on performance helped them put a kid into college. It didn't mean as much to specialists. So we gradually got specialists out of the model and focused it on primary care. And that's why when we built Tandigm Health, we built it on a primary care network first. We've just begun to introduce specialists. They are an important part of the value-based equation, but at the end of the day behavioral economics and what we learned from what the original group, was called the Renaissance Physician Alliance, was that you start with primary care. They're at the center and also they're professional. What you're trying to do here in a value-based environment is keep people healthy and keep them well.

And that actually professionally rewards primary care, that's why they went into medicine to begin with. So you're giving them the tools to help them be more successful professionally. And it doesn't take as much money, dollar for dollar to change their behavior. So the 422 primary care docs in the network has been the nucleus for Tandigm Health as we started this about five years ago.

Jay Ackerman:
What industry trends do you see right now that are beneficial to health care organizations?

Anthony Coletta:
I mean, I guess it's beneficial to different stakeholders. I can't put them all into the same as these trends being beneficial to all of the organizations unless there are certain organizations that are willing to really upend their business models, which I think makes sense. I think on the patient side, if I look at them as stakeholders, everybody talks about consumerism. I believe that's real. I think it is driven also by the way care's being paid for. And I think it's being driven by the increasing availability of data and information, both digital health and the way information is aggregated, biometrics and so forth to empower individual consumers. And this next two generations of patients, consumers are going to be far more savvy obviously than those of us that are in the aging boomer population. We were just on the edge of it, right? I mean, for me, I'm 67. There wasn't a web built. I was in practice already. So I think that consumerism is real and digital engagement of consumers. Maybe not what health plans typically think is digital engagement of consumers because that's just like texting me to remind me about my next medication is one thing, but truly engaging patients in platforms that help to adjust the way they think.

And also, software as a pharmaceutical. Say for instance, patients managing stress and low levels of anxiety through an engagement platform, which are being demonstrated to work, digital platforms. So I think consumerism is for real and rapidly evolving. I think to me, one of the most interesting trends that is sort of creeping up, that people may be seeing, or maybe not, but I'm seeing it. I've seen it directly in the network of Tandigm physicians, is the increasing adaptation and sort of improving the output and information inside electronic medical records. They're rapidly moving away from being seen by many physicians and other practitioners in the clinic as obstructionist, that these old clunky machines. Now they're rapidly getting better. And the doctors and the nurse practitioners and others who are working with it are beginning to understand and mind the information. They are very, very rich in information.

And they're beginning to utilize them as tools in their practice as opposed to just grudgingly documentation tools. And I think you're going to see that change. And one of the things we've tried to do in value-based efforts when I was at Independence Blue Cross and through Tandigm is continue to work towards that holy grail of a claims' database integrating with electronic medical records and that's happening. And that's going to continue to happen. And therefore, I think power will shift from health plans, which traditionally had all the data because of their claims data as well as the demographics that they have to the richness that employed by either health plans that learned to integrate with EMRs or to the providers who learn to integrate a claims' data when it's shared into their electronic medical record database. That would be a much richer 360-degree view of patients. So I think that evolution of the electronic medical record into the data and analytical world of delivery of care is increasing rapidly and a trend I think that's going to really affect the next five years, especially.

Jay Ackerman:
Let's talk about challenges that you see that are continually encountered in healthcare. What do you see as the greatest challenge?

Anthony Coletta:
I think it's intransigence, resistance to change. It goes back to like, you can't take a gallbladder out with a telescope, which, yes, you can. And in fact, you can do it in a way that people get up and leave the hospital on the same day. Both in medicine, but also in the existing business models, acute care business model, heads and beds, in health plans, managed care, copays and prior auths and all the things that are really out there to discourage people from getting care really to keep costs down. People begrudgingly leave them aside to approach new and different models of engagement. Now value-based care is gaining traction, but there's a lot of people who would just assume not have to deal with it.

If you look at health plans really converting a lot of their business to value-based care. The actuaries have to think differently. It's one thing to think about medical costs next year or the year after when you're just basing it upon widgets. But if you're basing healthcare costs based on behavior that's being driven by a quality cost equation of different set of metrics and not a fee-for-service world, but capitated world, prepayment for care, the way the actuaries who traditionally had very strong positions in health plans look at the world changes. The way the health plan has to think about pricing their products changes. In medicine as well, there are plenty of doctors would rather not deal with, just stay with the more I do the more I make. So I think that resistance to change is the biggest hurdle. I've been doing this for 30 years, one way or the other and it's been a good fight. And I do think that because of the GDP percentage and the cost quality equation, the overall economics, the burning platform is strong enough that there's sufficient change happening, but reluctantly we're dragging a lot of people along.

Jay Ackerman:
It's taken a long time to get to where we are with value-based care and we're still probably under less than 50% of care being provided in a results-based model. What do you think needs to happen in healthcare to accelerate the pace of change, or to reduce the resistance to change? And we see it unfolding rapidly in so many other industries, but what do you think can be done to accelerate the pace of movement here?

Anthony Coletta:
Yeah. I think the key is going to be the ongoing early successes that have some degree of scale. For instance, I'll give you an example in the Philadelphia market. So I left Tandigm Health after two years as a CEO to go back to the mothership, Independence Blue Cross, and be the executive vice-president of what we called facilitated health networks, which essentially are our provider strategy. And the facilitated networks, comes out of Clayton Christensen's Innovator's Prescription, the disruptive innovation. Could we not just have these networks out there waiting to be accessed, but could we facilitate them, integrate them through common platforms. Pay them differently, light them up, make them places that patients saw it out, as opposed to just being passive networks. And in the context of that, we did a value-based contract.

It was transformational. This was about five years ago with the University of Pennsylvania healthcare system. And we did it with other systems as well, but my example is with the Penn system. The arrangement, the partnership, which is key, allowed them to take risks on their readmission rate. So they decided that they would take full risk around any Independence patient that was readmitted within 30 days for any reason to a Penn hospital, all cost readmissions. And they would not charge the customer or the health plan if a patient got readmitted. That's a very dramatic equation. But in order to do that though they needed true partnership from the health plan. You can't withhold data from them about that in a situation like that. You've got to be really be a partner and you can't just walk away if there's a good year or a bad year. You got to be in it together.

And it turned out that they dramatically reduced the readmission rate for our patient population by like 25%. It was such a large number that even the university put it through a lot of different iterations to ensure that it was not just some kind of aberration. And so my point about that is that we're going to start to see innovative partnerships with scale players' successes as that starts to happen. And there are really, I think, innovative leaders, business leaders and physicians, as well as administrative lay executives willing to experiment and upend a bit of their business model. And I think we're going to see this continue. I think you see it with health plans that are beginning to move into the provider space, push the envelope a little bit about what people are comfortable with because they know that at the end of the day that this movement has taken on a life of its own.

It's totally different than it was 20 years ago when we didn't have the level of data analytics that we have today. And we didn't have the compelling national economic crisis. Put COVID aside, just the 18%, 20% of the GDP number and the very discouraging quality attributes associated with $10,000 per capita expense in the United States. I mean, how long could that continue? And people are going to step up. And when they start to see scale successes, I think it'll accelerate things. Maybe not to the same speed that a lot of us would like to see it happen, but it will happen.

Jay Ackerman:
On the cost curve, do you think that with the change taking place, we can actually start to turn the cost curve down, not just flat down, but turn it down?

Anthony Coletta:
Look, those of us who cared for patients for 25 years, we saw the ability to turn it down every day. We saw waste and not what I would call necessarily fraud. It's just waste every day. So look, you've got to get the tiger by the tail first to start, but I am highly optimistic and I'm not a statistician or an economist, but the opportunity to actually turn it down based on the degree which we waste today, I'd say there is that opportunity.

Jay Ackerman:
So let's talk about a couple of different groups in healthcare, and I'd be interested in kind of your advice or your point of view to them. So you stepped out of Tandigm or you're in Tandigm as chairman, you walk into one of the large national health plans, and you're talking to kind of the C-suite executives, what advice or what imperative might you put on the table for them in navigating through this moment in time with COVID and with really the necessity to accelerate the value-based care movement?

Anthony Coletta:
In the health plan C-suite?

Jay Ackerman:
Yeah.

Anthony Coletta:
I mean, I would probably be pretty provocative at that. I spent three years in healthcare C-suite when I left CEO of Tandigm after two years and went as executive vice president to Independence Blue Cross. The other corner office with my friend and great colleague Dan Hilferty, who's the CEO of Independence Blue Cross. There are certain things that I put out there that not everybody was really happy with, one or two levels down below me at the organization. One is that the days of typical payer provider, used car negotiations are over. Those days are over. If you want to really manage the costs, you've got to consider real meaningful partnerships. We've got to develop trusting partnerships amongst the C-suite executives.

You're going to have to extend yourselves out there. You're going to have to put your past behind in terms of contract negotiations, which could get really nasty and threatened to go out of network, yada, yada, this. All that stuff's got to end. And they're going to have to be far more transparent with the thing they've held closest to their chest is their claims data. You can't build a value-based relationship without transparent sharing of claims and information. And I really tried to push the envelope in sharing what other providers get paid to that. I mean, there's all this legal and contractual stuff around that. Everybody gets all nervous about it. They didn't want to see me in a yellow jumpsuit, that sort of thing, but the patients and consumers deserve that level of transparency.

And so I'd tell them to see if they can't find who their true provider partners might be. They can't be everything to everybody. And develop relationships at the C-suite level because there are a lot of people that have the common theme of wanting to provide far better care for the hospitals or doctors, for their patients, for the health plans to members. But there's a lot of good meaning people on both sides who want to actually be able to do that. You just got to get out of the old world of the used car provider contract negotiations and develop true partnerships. I think that's a major thing for health plans. I also think they need to get into the provider business. Undoubtedly, they need to get into the provider business one way or the other. Tandigm Health can be seen as a way Independence has gone into the provider business.

It's not that we own all these practices, although we did take a controlling interest in MSO from the largest primary care practice in our network, and we're going to build an MSO that other doctors can attach to. But they have to be close to the provider. The managed care, in my opinion that business model is over. It got twisted, it's ineffective. We haven't managed costs or maintained health. HMO's never delivered on the promise. And so find people who are really into to do something dramatically different. On the hospital side, got to be executives that are willing to upend their business model. It won't be overnight, but to upend their business model hospitals need to eventually take care of truly sick people and the model to decentralize and hospitals at home. That's the way the future is headed.

COVID may have helped a little bit by pushing telemedicine and that sort of thing, but I'm a big proponent of exponential thinking. It's going to be applied to our business models. It's going to accelerate even faster than we expected it to. Moore's law will come to play and those that are on the leading edge of that change. And then finally, the patients and doctors are the other stakeholders besides health plans and hospitals. Doctors, I fervently believe need to come together in meaningful healthcare well managed organizations. And a number of those organizations should be led and managed by doctors, so that they can make sure that their patients go wherever the best care is being delivered. Not just inside any particular system or anything surrounded by a moat, and consumers need to really truly get increasingly engaged in their own health. All easier said than done, but all doable.

Jay Ackerman:
One group you haven't mentioned yet is CMS. So what advice or what ask might you have right now for CMS?

Anthony Coletta:
I personally think that CMS is on the right track. I think there are elements of the ACA that are on the right track. I think the key there is it's embodied in Medicare Advantage and private public partnerships because what I've seen in Medicare Advantage, and I've been part of the model as we evolved through the years and 35,000 of the patients in Tandigm are Medicare Advantage patients, is that public private partnership with CMS contracting with well-run, well-meaning payers who can make a margin on the business, but also begin to manage Medicare in a way that you keep the Medicare recipients happy, the triple aim, and improve their experience in care, and I think that a CMS would be well-served by continuing to nurture those partnerships and not try and do it all themselves.

There are a lot of great ideas that are coming out of CMS now. And I think you're going to see the same things applied to the individual marketplace and the ACA in the commercial environment. I think you'll see the stars, quality metrics. You'll see risk adjustment that's happening just as it happens in Medicare Advantage. The same thing can and will happen in the commercial individual exchange populations. And I think that you'll see health plans that are savvy and Medicare Managed begin to come very efficient contractors for the government in the ACA world. So my advice to CMS is continue to disrupt a bit, innovate and push the private public partnerships.

Jay Ackerman:
Fantastic. Hey, Tony, this has been a phenomenal conversation. Let's try to bring it to a wrap and it's always fun to wrap up conversations like this with five quick questions just top of mind, and kind of how you're thinking. So what keeps you up at night?

Anthony Coletta:
The health and welfare of my children and my grandchildren. Truly, these days it's that.

Jay Ackerman:
How many grandchildren?

Anthony Coletta:
Three, with another on the way. All boys. So the fourth boy is on the way. And I really, really believe all of us have, an obligation is an understatement, to leave a sustainable, healthy, safe world behind for them because we're not going to be around here forever. I can't protect them forever. And even my children, they're grown children, but given this, especially what's happened in 2020, that's what keeps me up at night.

Jay Ackerman:
Yeah. Well, when you're a little restless at night, thinking about that, what book might you grab from your nightstand and why are you reading it?

Anthony Coletta:
I started to read more and more. So I'm reading Travels with Charley by John Steinbeck. It's a great book and actually I'm doing that because before COVID came and for the last two years I had a plan to buy an RV. I bought a motor home in February, just before COVID hit. Now everybody wants one. I have one. And it's amazing. I've only owned it for six months or so, but done some traveling in it already, and there are so many corollaries between John Steinbeck and Charley in Travels with Charley. And I've got Gus. So it's Tony and Gus. It's amazing. The book was written, I guess, in the 1960s. So many parallels that still work for today.

Jay Ackerman:
That's great. What's your favorite app on your mobile device?

Anthony Coletta:
It's my retirement fund, Schwab.

Jay Ackerman:
Well, the stock market has had a great year. So I guess you probably opened it pretty regularly.

Anthony Coletta:
Yeah. But people tell me, don't look. And so I try not to. I mean, I wouldn't say Facebook is my favorite app, it's an addictive app and there's only one part of Facebook that I love the most, which is there's a group... I love to cook and there's a group that does homemade Italian recipes. There's a Facebook group.

Jay Ackerman:
Yeah.

Anthony Coletta:
Love that group. I love that group. They're great. They share recipes openly and talk about our moms and our grandmoms. So I'd say that's probably number two to my retirement fund app.

Jay Ackerman:
Well, that's probably what I need to share with my mom. And growing up in an Italian family, we always had that second kitchen in the basement.

Anthony Coletta:
Exactly. That's the best.

Jay Ackerman:
How do you invest in yourself?

Anthony Coletta:
I'm learning more and more how to take good care of myself. Just before COVID hit, I started at a gym. I'm thinking more carefully about what I eat and drink. I built a hobby room in the basement. I'm going to nurture some of the things I've always wanted to do. Tie flies, I've learned to fly fish. I used to build models all the time. So there's going to be a station to build models. I read more. I don't know that I go out of my way for myself, but I do realize that for me to be there for my kids and my grandkids, my wife, and for the company and for whatever else. Other ideas might still be inside me, I got to sleep well and get out in the RV with Gus once in a while which I've done.

Just got back from a week-long trip to Cedar Run, Pennsylvania. The Grand Canyon of Pennsylvania. Beautiful area. Just me and Gus. Took long walks and reflected on the past and what the future might hold. So that's as philosophical as I'm going to get.

Jay Ackerman:
What's the most creative thing you've done during the stay at home period?

Anthony Coletta:
Oh, that is building the hobby room. We had an unfinished basement and it was all cluttered with boxes and things. And I said to my wife we should use this space in a meaningful way. We just finished it. Just started to move back in yesterday. I love watching spaces be created. We built one home and just the whole process is... So that would clearly be my most creative move during this a stay at home period.

Jay Ackerman:
It will certainly be one that your grandchildren are going to want to visit.

Anthony Coletta:
True, it's already happened. They'll make a model with poppa.

Jay Ackerman:
Yeah. Well, hey Tony, this has been great. And thanks for sharing your insights and your views on healthcare and how it's evolved.

Anthony Coletta:
Sure, Jay. I appreciate you having me and best of luck with work at Reveleer.

Outro:
Thank you for listening to The Value-Based Healthcare Podcast. If you enjoyed this episode, don't forget to share it via LinkedIn. For more healthcare technology news and information, follow Reveleer on LinkedIn. We hope you join us next time.