Providing mental healthcare is dramatically more important in new value-based payment models. Integrating mental healthcare with all other health care is the only way for many patients to achieve the best possible outcomes. If a patient is suffering from anxiety or depression, it is much harder to manage other conditions, which leads to unnecessary complications and higher cost
As a part of my interview series with leaders in healthcare, I had the pleasure to interview Bob Kocher, MD, a Partner at Venrock focusing on healthcare IT and services investments. He currently serves on the boards of Lyra Health and Devoted Health, both of which he co-founded, as well as Virta Health, Aledade, and the Blue Cross insurance company Premera. Prior to Venrock, Bob served in the Obama Administration as Special Assistant to the President for Healthcare and Economic Policy on the National Economic Council. Among other accomplishments while on the Obama Administration, Bob was one of the shapers of the Affordable Care Act (ACA) focusing on cost, quality, and delivery system reform and health IT policy. Before the White House, Bob was a Partner at McKinsey & Company where he led the McKinsey Global Institute’s healthcare economics work.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
I’ve always been interested in two things: science and people. Healthcare was a way for me to marry those two passions.
My career at McKinsey & Company, the White House, and now Venrock has been spent thinking about new ways to make our health system work better. To me, that means both delivering exceptional care every time and also having every patient treated with love and care every time. For the healthcare system to work better, caregivers must have the right tools, knowledge and insights to deliver the care that they would want if they were the patient.
I also think that we, as healthcare leaders, have more of an obligation to make sure patients can afford to access the healthcare system. Too often we see patients needing to wipe out their savings in order to receive life-saving treatments. I chose this career path to help change that and to help make sure patients get excellent care more reliably.
Can you share the most interesting story that happened to you since you began leading your company?
One of the more interesting experiences during my time at Venrock was founding Lyra Health along with David Ebersman and Bryan Roberts. Lyra Health is a company that helps people gain rapid access to evidence-based mental healthcare services. When we were creating Lyra, we made two really important discoveries about the space.
First, counter to conventional wisdom, there is not a dramatic shortage of behavioral healthcare providers to take care of the people who need mental healthcare in this country. They just aren’t connected to the insurance networks because insurance networks have decided not to pay enough. If you are willing to pay fair prices, there is capacity available.
The second discovery was that among the mental health professionals that do exist in the networks, a shocking number were not practicing evidence-based care. To me, that means that if a patient goes to see them, it is sadly going to be a waste of time and money.
So, we knew what we needed to do was to pay fair prices to build a network of clinicians that are practicing evidence-based care and are available to see people. By doing that, we’ve allowed thousands of people to efficiently access better care.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I passed out in anatomy in medical school when we were learning to place IVs. That was when I realized that if I do not drink enough water, I have the propensity to pass out — a lesson I had to learn a second time during my surgical rotation. I have been far more careful about eating and drinking ever since.
What do you think makes your company stand out? Can you share a story?
At Venrock we like to take original approaches to solving big healthcare problems. One thing that I think we do really well is work with talented leaders from other industries to translate their knowledge and experiences to healthcare.
For example, Virta Health is a company that works with health plans, employers, and consumers to reverse type 2 diabetes. The company was founded by a wonderful CEO named Sami Inkinen. Prior to Virta, he had founded the online real estate destination Trulia, so he is exceptional at building software and services. We’ve been able to work together to help take all of his strengths in the consumer technology industry, add healthcare experts to the team, and design the services better than if it had been done purely by healthcare clinicians alone.
What advice would you give to other healthcare leaders to help their team to thrive?
Hire carefully and focus on ROI.
The most important thing you do is hire the people who work with you. While at times you may feel stretched, it’s important to hire the person that is most likely to succeed rather than someone you think is going to perform just okay. I like to enlist trusted people from outside of a company to help me interview candidates and reflect on them, so we do not use the stress of the moment to hire too reactively and only optimize for the short term.
The next most important thing in the healthcare industry is your product’s ROI. You need to build products that quickly become a must-have by showing a large ROI for whomever pays for your service within 12 months. Every stakeholder, except pharma, has very low margins and cannot afford to wait very long for payback. Products also need to have large effect sizes so you do not need to do large studies to figure out if they work. Healthcare has enough inefficiency and excess cost that new products and services should have impact that is visible from space.
Ok, thank you for that. Let’s jump to the main focus of our interview. According to this study cited by Newsweek, the US healthcare system is ranked as the worst among high income nations. This seems shocking. Can you share with us 3–5 reasons why you think the US is ranked so poorly?
It’s important to keep in mind that there’s no comprehensively good way to rank health systems. When I look at the US health system, I see opportunities to make it better — but I also see many people getting the best care in the world.
It is my hope that we can reduce the variations that occur in our health system by applying technology, talent and imagination so that patients get the type of care they want for their family delivered flawlessly every time. I work with many startups trying to build better systems of care, so I’ve witnessed the benefits of bringing software, services, and talented people in order to build systems that work better.
While our system falls short in some ways, I think we should also look at the ways that it’s the best in the world and seek to scale what works really well already to make our system better faster.
You are a “healthcare insider”. If you had the power to make a change, can you share 5 changes that need to be made to improve the overall US healthcare system? Please share a story or example for each.
1) Continue changing the payment models to reward clinicians for delivering higher quality at a lower cost. In my experience these models make it possible for clinicians to find creative ways to help patients. I’ve seen these models drive new touchpoints for care such as food pharmacies, transportation, mental health care, telemedicine and homecare.
2) Make access and care more affordable by reducing cost sharing for medications and services. Addressing medication access and affordability will dramatically improve the health and welfare of people. Most Americans have deductibles that are $3k or more. This makes it very expensive to access care when they are sick and difficult to afford the medications they need. For patients with chronic diseases, high deductibles mean they need to spend several thousands of dollars every year. That crowds out savings, retirement accounts, and consumer spending.
3) Reform the medical malpractice system and reward doctors for following clinical evidence. We should consider reforming medical malpractice by offering doctors safe harbors for proving that they are following clinical guidelines. I’ve watched doctors spend their careers worried or traumatized by the way the current system works. This can cause clinicians to provide duplicative or unnecessary care. If we could instead encourage doctors to follow the best evidence for care and protect them from lawsuits that would help speed the adoption of evidence and new treatments.
4) Expand Medicaid in all states so that the lowest income among us can access healthcare. Medicaid expansion under the ACA intended to provide care for all low-income Americans. A 2012 court decision made the Medicaid expansion optional for states, and today there remain 14 states that have yet to expand Medicaid. That leaves 2.5 million people in a coverage gap where they cannot access care through the ACA or through their state’s Medicaid program. If they lived in another state, they would have access to healthcare. This is unfair to those individuals and leads to unnecessary care and poor outcomes. We should create incentives in those states that have not expanded access to care to expand Medicaid.
5) Create incentives for physicians to practice independently from hospitals, particularly primary care doctors. One of the most interesting findings from Accountable Care Organizations that were created as a result of the ACA is that small independent doctor groups have actually been the most effective at saving money and delivering higher quality care. The problem is that hospitals have hired lots of doctors and these larger health systems have been less successful at saving money and boosting quality. Physicians need ways to break free from health systems. One way could be to have insurance companies offer physicians leaving health system access to competitive insurance contracts in order to make newly independent practices viable. One place this is happening is in Charlotte, North Carolina where we’ve seen two newly independent physician groups form in recent months after breaking away from large health systems.
Ok, it’s very nice to suggest changes, but what concrete steps would have to be done to actually manifest these changes? What can a) individuals, b) corporations, c) communities and d) leaders do to help?
At Venrock we believe the solution is to create new companies that bring together talent and imagination. The power is in showing how these concepts can be brought to life, scaled, emulated, and deliver more affordable, higher quality healthcare.
I also believe that people should be applauding the work of the CMS Innovation Center who is showing that there is a lot that could be done administratively right now to make healthcare better without figuring out a way to pass bills through Congress.
As a mental health professional myself, I’m particularly interested in the interplay between the general healthcare system and the mental health system. Right now we have two parallel tracks mental/behavioral health and general health. What are your thoughts about this status quo? What would you suggest to improve this?
I couldn’t agree more fully. That’s why we founded Lyra Health. Providing mental healthcare is dramatically more important in new value-based payment models. Integrating mental healthcare with all other health care is the only way for many patients to achieve the best possible outcomes. If a patient is suffering from anxiety or depression, it is much harder to manage other conditions, which leads to unnecessary complications and higher cost. Several of our companies including Virta Health, Aledade and Devoted Health have incorporated mental healthcare into their everyday features of their products and services.
How would you define an “excellent healthcare provider”?
Someone who treats every patient as if they are their own mom or dad.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
A quote by Albert Camus: “In the midst of winter, I found there was, within me, an invincible summer.
And that makes me happy. For it says that no matter how hard the world pushes against me, within me, there’s something stronger — something better, pushing right back.”
This has helped me maintain optimism and joy even when things have been very challenging.
Are you working on any exciting new projects now? How do you think that will help people?
I’m very much enjoying working with Aledade to help them dramatically expand their primary care networks, which helps doctors learn how to thrive in these new value-based payment models. What’s so great about this is that primary care physicians make more money when patients are healthier and avoid complications. This leads to better care and better patient experiences.
What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?
I’m always proud of Venrock’s Running Though Walls podcast that brings entrepreneurs and leaders together to talk about their experiences building companies.
For an understanding of today’s health system, I highly recommend Ezekiel Emanuel’s “Reinventing American Health Care: How the Affordable Care Act Will Improve Our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System”.
One other book to check out for personal growth would be “The Passion Paradox: A Guide to Going All In, Finding Success, and Discovering the Benefits of an Unbalanced Life ” by Brad Stulberg and Steve Magness.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would address loneliness among seniors. I think that the way we conquer loneliness among retired people is by finding ways to value their knowledge in all forms of business and life. We need to help them find more engagement with their families, friends, communities and hobbies.
How can our readers follow you on social media?
Thank you so much for these insights! This was so inspiring!