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Armando Cardoso of PayrHealth: “Invest in Digital Transformation”

Invest in Digital Transformation. Key industry stakeholders should continue to come together to standardize — and simplify — administrative coordination workflows as much as possible across the country. This can be as simple as creating more common processes (e.g., credentialing coordination) or more complex coordination initiatives (e.g., multi-party data sharing and insights). To sustain our wildly complex system, technology […]

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Invest in Digital Transformation. Key industry stakeholders should continue to come together to standardize — and simplify — administrative coordination workflows as much as possible across the country. This can be as simple as creating more common processes (e.g., credentialing coordination) or more complex coordination initiatives (e.g., multi-party data sharing and insights). To sustain our wildly complex system, technology and digitization is critical. Today, we see CMS and the government driving many of these broad-based requirements.


As a part of our interview series called “5 Things We Must Do To Improve the US Healthcare System”, I had the pleasure to interview Armando Cardoso, CEO of PayrHealth.

Armando is a healthcare expert, with deep experience in value-based contracting and fee-for-service. He has led healthcare teams from multiple perspectives — National Managed Care Analytics at Ascension Health (national healthcare provider), Head of Growth at Clover Health (startup Medicare Advantage plan), and provider contracting for Mid and Western America at CareCentrix (specialty benefit manager). He also spent time in Finance covering the healthcare industry with Morgan Stanley’s Healthcare Investment Banking team in New York and Summit Partners’ Healthcare Private Equity team in Boston. Armando earned a degree in finance and accounting from Georgetown University. He lives in Austin, TX with his wife, son, and two dogs.


Thank you so much for joining us in this interview series! Before we dive into our interview, our readers would like to get to know you a bit. Can you tell us a story about what brought you to this specific career path?

Thank you for having me join the series! Of course, I’ll start by saying that I’ve been very fortunate to find myself on this path. My journey, fueled by curiosity and serendipity, has allowed me to see the healthcare industry from a wide-ranging set of perspectives.

I did not grow up knowing I would be passionate about a career in healthcare. For general context, I’m a first-generation Cuban American from Miami, FL that worked a number of odd jobs up to graduating high school — including a tutor, landscaper, home painter, disc jockey, and even a party entertainer (yes, I led line dances and doled out party-favors at Bar/Bat/B’Nai Mitzvahs). Before working with the industry, my central experience with healthcare was through my father’s journey in the system. He lived with polycystic kidney disease (PKD) and had other brushes with the industry along the way — from a car accident that left him temporarily paralyzed to ultimately colon cancer, which metastasized over a nearly ten-year journey.

My time in finance afforded me a sturdy foundation of critical thinking and work ethic to spring from. Then, working within the industry, I gained valuable experience seeing the contracting process from ‘both sides of the table’ (i.e., payer and provider perspectives) and even from ‘in-between’ as a third-party specialty benefit manager. The common thread throughout my experience is working with great leaders and mentors. This all came together when I was approached to become the CEO of PayrHealth. This opportunity for me represents the perfect combination of a cause I’m passionate about (i.e., making best practices accessible to key healthcare stakeholders) and intellectual engagement (i.e., building a new alternative to meet the needs of a massive market segment).

Can you share the most interesting story that happened to you since you began your career?

During my time at Summit Partners, the Boston Marathon took place on April 15, 2013, and from our offices, we heard a loud boom that drew everyone towards the windows. We could see a plume of smoke from where the noise originated and then shortly thereafter another explosion bellowed, and we could see a second stack of smoke building. As you can imagine, it was disorienting for a number of reasons and people reacted in different ways. Although we didn’t know what was happening yet, and in fact wouldn’t for a while, we knew something was wrong. I was standing next to a colleague, and we instinctually just put our arms around each other’s shoulders. My thoughts quickly went to a friend who was running the race, colleagues from work who had been watching the race, and all those gathered for what should be a joyous celebration of the human spirit.

I was incredibly fortunate that neither I nor my direct friends and colleagues were harmed. One of the bombs had gone off in front of my apartment at that time, where I could have easily been watching the race that day. My friend from Morgan Stanley, who had run in the race, offered me and some other displaced colleagues his family’s hotel room as they left back to New York. Seeing friends, co-workers, and the city pull together served as a reminder of how complicated, fragile, and resilient humans can be.

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?

So many funny mistakes to choose from! One that comes to mind wasn’t from when I was first starting, but I think you’d enjoy it. When I was working with the startup Medicare Advantage plan, we would seek out ways to engage the local communities we expanded into. One of the more memorable ones was in San Antonio, which was home to the Texas Senior Games, the state chapter of the National Senior Games Association — they are a great organization committed to seniors having an active lifestyle.

I was not familiar with one of the most popular events, pickleball. I thought that a game with such an amusing name and my recently heightened workout regimen for upcoming wedding photos meant that I could surely hold my own on the courts. Wrong… utterly wrong. The seniors that showed me how the game is played, my one and only time, absolutely smoked me. This was a great reminder to never assume, be humble, and have fun!

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

It is hard to choose just one because life presents such a diverse set of circumstances! That said, a foundational one for me is from Marcus Aurelius’ Meditations: “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” I tend to question everything, this sometimes can come across as skeptical, but it’s just my curiosity and relentless pursuit to distill things down to first principles.

We use the Predictive Index for our recruiting and talent optimization, my profile is what they call a “Venturer.” This comes to mind because, in their description, they say the Venturer profile is “unimpressed with tradition.” It makes some of my colleagues laugh because it’s true. I believe breaking things down and questioning everything not only has the benefit of unlocking creativity in teams, but it has the added benefit of creating a common language. The tremendous value of having a common language to describe situations, ideas, or visions is often overlooked. This brings to mind another life quote attributed to John Rockefeller, “the secret of success is to do the common thing uncommonly well.” I told you, for me, it’s hard to choose just one quote!

How would you define an “excellent healthcare provider”?

Excellence is a moving target, but some of the fundamentals don’t change — empathy, passion, skill, collaboration, awareness, and action. My team has the privilege of working with a diverse set of independent healthcare providers that are excellent. This question raises another point in my mind, we use the term “provider” to refer to both the individuals and the organizations. Excellent outcomes take a team — even if you’re a sole practitioner, your team extends to the systems and partners you invest in. I think this dynamic — individual versus organization — is an interesting one to consider because as an industry we need both to work in harmony.

What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?

There are so many great resources out there. Some top items that come to mind for me are:

  • Industry-Specific Insights. Kaiser Family Foundation (KFF) and The Commonwealth Fund, including their podcast, The Dose. I also enjoy watching TedTalks, which are always engaging and inspiring.
  • Managing People and Teams. Radical Candor (Kim Scott), Trillion Dollar Coach (Eric Schmidt, Jonathan Rosenberg, Alan Eagle), or works by Adam Grant (“Think Again” or “Originals”) are great reads.
  • Generally Thought-Provoking. The Hard Thing About Hard Things (Ben Horowitz), Sapiens (Yuval Noah Harari), or the Happiness Hypothesis (Jonathan Haidt) encourage what I will call “zooming-out” to consider the broader picture we are operating within.

For me, the common themes here are the (a) distillation of complicated topics down to first principles and (b) uncompromising pursuit of an objective point of view, while appreciating that complete objectivity is unattainable. There are so many great minds out there, these examples push me to question and engage more.

Are you working on any exciting new projects now? How do you think that will help people?

We’ve launched a new product that democratizes best practices in payor contracting and revenue cycle, making these practices accessible to independent providers. This vision was realized through integrating two companies with decades of experience serving independent providers and making strategic investments with the support of our terrific private equity sponsor, Osceola Capital Management (OCM). This transformation is embodied by our recent name change to PayrHealth.

Much of the industry dialogue has been rightfully focused on equity, access, and the shift from volume to value — making the future more tangible in many leaders’ minds. Most of this conversation is geared around the largest health systems. However, there are some less discussed realities that need to be addressed to enable independent incumbents — who deliver a large portion of care in our country — to build towards and share in this future.

One of those practical realities which, in my opinion, goes underappreciated is understanding the foundational relationship between payers and providers. In my experience, this core stakeholder relationship is often reduced to something that’s overgeneralized and inaccurate (e.g., “payors just care about keeping expenses down” or “every provider thinks they are special”). It’s important for all providers to have a good understanding of their payor portfolio, but even more important for independent providers who need to ensure they are making informed strategic decisions in this dynamic environment. Yet, oftentimes, independent providers are far removed from understanding how their payor relationships are performing. We are excited to help remedy this by supporting industry education and serving more clients.

Ok, thank you for that. Let’s now 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 an incredibly important topic for the industry and country to debate. In my industry experience as an advisor, investor, and operator I have been closest to the inherent issues tied to Administrative Efficiency. Administrative Efficiency is inextricable from the four other areas studied in this research — Care Process, Access, Equity, and Health Care Outcomes — since it is typically at the crux of money being exchanged. Three reasons or differences between the other countries, which contribute to the unique Administrative Efficiency issues we face, are:

  1. Universal Healthcare Coverage and Access. Regardless of your position on U.S. policy, one could functionally see how having a universal program — of any sort — in place could materially simplify dynamics and impact utilization trends in these other countries. Even in a multi-private-payor universal system, like the Netherlands, benefit design and funding standardization have a broad impact. This is one of the key reasons I believe we are ranking so poorly in comparison to these other systems.
  2. Healthcare Industry Financing. The history of the American healthcare industry is fascinating. Harvard Business Review did a great summary on the history of employers funding healthcare in “The Big Idea” series, with “Transforming Health Care” back in 2019. Having a convoluted mix of providers, individuals, employers, health insurance companies, the federal government, state governments, privatized government programs, and other risk-bearing entities financing the $3.5+ trillion healthcare industry translates to an unfathomable amount of complexity and administrative burden.
  3. Plan Benefit Design Complexity. Although it‘s true that there is a concentration of membership (i.e., patients) across five private insurance carriers, this leads many individuals to the wrong conclusion that this would lead to any standardization. Each carrier is really an aggregation of countless risk pools (i.e., plan-types, geographies, patient demographics, underlying contracted provider networks, etc.) that translate into different premiums and benefit designs. This again leads to a lot of administrative work, investigative re-work, data integrity issues, and general confusion on how specific contracts or relationships are performing.

As 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.

I touch on this in some of my thoughts below, but it is important to underscore that there is no single idea or solution that can fix our healthcare system. What’s more, it’s a constantly moving target as our communities, habits, and technologies evolve. Below are some of the top thoughts that come to mind for me today.

  1. Invest in Digital Transformation. Key industry stakeholders should continue to come together to standardize — and simplify — administrative coordination workflows as much as possible across the country. This can be as simple as creating more common processes (e.g., credentialing coordination) or more complex coordination initiatives (e.g., multi-party data sharing and insights). To sustain our wildly complex system, technology and digitization is critical. Today, we see CMS and the government driving many of these broad-based requirements.
  2. Invest in Patient Education. We need more non-partisan and non-financially incentivized voices to simplify key industry drivers for patients. Most people don’t understand how healthcare works in our country, informed consumers and voters make for valuable change. Patients’ demands can drive change in immeasurable ways — regulatory policy, provider practices, and payor initiatives.
  3. Invest in Whole-Person Care. We are recognizing as a society and industry how intricate well-being and health are. In many ways, COVID-19 accelerated this conversation with dialogue surrounding mental health and the impacts social structures have on individuals. Expanding our definition of what is included in healthcare and how it relates to more traditional medicine is a promising area of development.
  4. Combat Data Asymmetry. Economic equilibrium in the supply and demand model is difficult to achieve if there is pervasive information asymmetry or apathy among market participants. Providers of healthcare should never indiscriminately sign payor agreements without understanding what they are accepting. Without this understanding, one can’t strategically manage resources and sustainably deliver on one’s mission. This will be instrumental in unlocking higher quality of care and more sustainable economics.
  5. Demystify Value-Based Care. I’ll start by saying that I am a value-based care (VBC) advocate. However, VBC is an incredibly broad term that gets tossed around as a sort of silver bullet. Practically speaking, smaller providers in large parts of the country don’t have a practical path to assume full risk today. With a challenge this large and multifaceted, there is no silver bullet — the majority of U.S. healthcare is delivered on an FFS basis and a large portion of healthcare providers are independent. One of the soundest paths for providers to practice VBC is to understand their performance in a fee-for-service (FFS) environment, not directly jumping into the deep-end with no patient population experience. I’d like to see the industry invest more energy in discussing how all key stakeholders can improve the system, not just the largest and best-funded organizations.

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?

The single most important step is to engage in more productive debate and communication between key stakeholders. I wholeheartedly believe that authentic engagement makes all things possible, leading to more creative and sustainable solutions than anyone could have envisioned.

The COVID-19 pandemic has put intense pressure on the American healthcare system, leaving some hospital systems at a complete loss as to how to handle this crisis. Can you share with us examples of where we’ve seen the U.S. healthcare system struggle? How do you think we can correct these issues moving forward?

There are countless examples of how this pandemic tested our system, one example that comes to mind is healthcare in rural America. Nearly 50 million Americans live in rural areas, and they face formidable challenges. According to the CDC, rural populations are older, have higher rates of chronic disease, and are more likely to have a disability. All of this against the backdrop of limited healthcare infrastructure. According to the NC Rural Health Research Program, UNC Sheps Center, 170 rural hospitals have closed and 700 more are at risk of closing. Moreover, the CDC points out that many rural hospitals have a limited number of hospital beds, ICU beds, or ventilators, which can affect their ability to treat patients with COVID-19.

Addressing this complex issue will take education, debate, investment, and technology to address. Technology will have to play a central role in creating nimble and cost-effective solutions to our rural communities. The reason it will be so critical is that it can shift overhead across broader addressable markets, which is an underpinning reason for the suboptimal infrastructure in rural communities. The smaller populations combined with less prevalent preventative patient trends make it difficult for providers to sustain in a fee-for-service environment dependent on brick-and-mortar infrastructure. Again though, I think it is critical for rural healthcare providers to understand the fundamentals of their payor agreements, particularly reimbursement.

How do you think we can address the problem of physician shortages?

The Association of American Medical Colleges (AAMC) projections are staggering. They point out not only the familiar key driver (i.e., an aging population — both more seniors needing care and more doctors retiring) but also that this shortage is based on current utilization trends. As we know, current trends aren’t reflecting an optimal system (i.e., think health equity and preventative care).

The two direct and simple, but incredibly hard to execute, solutions are (i) train more people and (ii) leverage technological efficiencies wherever possible to expand the capacity and efficacy of those physicians we do have. Across both of these solutions, we should also contemplate how we could make it easier for foreign-trained physicians to be licensed in the United States.

How do you think we can address the issue of physician diversity?

There are great organizations focused on health equity, which I believe would be partially addressed by a more diverse physician workforce. One organization is the Center for Healthcare Innovation (www.chisite.org), which has a number of equity projects. One of them comes to mind for physician diversity, because it is such a lengthy issue to address — starting with childhood education. The Science Runway is a national mentorship and educational program that encourages, inspires, and mentors girls interested in STEM- and healthcare-related fields. The Science Runway aims to support girls through mentoring sessions with female healthcare and STEM professionals. These types of organizations are foundational to addressing the issue of physician diversity.

I’m 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 believe that they shouldn’t be considered two different systems because they are inherently interlaced. COVID-19 has accelerated the broader appreciation for this need, but there are many key challenges to overcome. From social stigma to limited access, there is a broad range of issues in the status quo. There are many efforts underway across the country, from education to venture capital investments, that are working to address these issues. Change won’t be overnight, but it is imperative that we don’t slow down the conversation.

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’d propose that the most effective movements recognize and plan for human elements and practical realities. Moreover, there are many promising and righteous movements underway in countless areas of the industry. In this vein, I don’t see one movement that will solve some of our most pervasive problems. It comes back to the fundamentals, such as communication and accountability.

More of our habits and tendencies are rooted in our childhood than we would care to admit. This includes healthy and unhealthy habits. One segment of the population that we should all agree to prioritize is our country’s children. Fixing healthcare is going to be a multi-generational endeavor. Rallying around increased access to whole-person healthcare for all children is a movement worth inspiring.

How can our readers further follow your work online?

Readers can follow me on LinkedIn, where I’ll be posting updates. You can also find engaging content on our company website, www.payrhealth.com or the PayrHealth LinkedIn page.

Thank you so much for these insights! This was very inspirational and we wish you continued success in your great work.

Thank you for the great questions and your time! This was a pleasure.

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