The Future of Healthcare: “Electronic Health records need to speak to each other” with Joe McErlane, Founder and CEO of NeoPath Health

Electronic Health records need to speak to each other. The world is changing and although some connectivity with EHR systems is taking place, the reality is most medical records are siloed and reside in a single system. Patients move from clinic to clinic, they cross state lines. Our pets and vehicles have better record keeping […]

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Electronic Health records need to speak to each other. The world is changing and although some connectivity with EHR systems is taking place, the reality is most medical records are siloed and reside in a single system. Patients move from clinic to clinic, they cross state lines. Our pets and vehicles have better record keeping systems than we do. It needs to change.

Asa part of my interview series with leaders in healthcare, I had the pleasure to interview Joe McErlane, NeoPath Health Founder and CEO. Joe has worked to improve employee health for companies looking to control the spiraling cost of employee medical plans since 2007 with NeoPath Health, a Minnesota based onsite clinic provider.

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 began my career working in the employee benefit industry. I can say that it is not the most glamorous business, but it was a great place to start after college. In the benefits industry they tell you that you are in healthcare and you believe that you are. Over time I realized I was on the finance and “policy” side of healthcare.

About 5 years into my career, I was preparing for an enrollment meeting and my client asked me to wait in the lobby of their clinic. The clinic was an Indian Health Service (IHS) clinic as my client was a tribal community. As I am sitting in the lobby with a pile of forms for the enrollment meeting, I watched as the physician would casually walk from the back directly into the waiting room and greet his patients. I distinctly remember the look of appreciation on the patients face as they were brought back to the exam room. That is when it hit me: I wasn’t in healthcare. I decided at that moment a career change towards care delivery was my next step.

That evening I went back to my hotel room, using data that I had on my laptop I began to review and underwrite employer healthcare data. It didn’t take a long time to figure out that you really don’t need insurance at all for primary care services. This was also pre-WIFI, and for at least one night I thought I had invented employer based clinics. The truth is employers in the US and other countries have had employer based healthcare services going back to the 1860’s, but regardless, I found something I was passionate about.

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

I like to remind people that employee health goes beyond just the employee. We had a patient come to one of our clinics and worked with our physician to develop a plan to quit smoking. With our clinic’s help, the patient began smoking cessation products and developed a plan to quit. To keep a level of accountability during this process, the patient would stop by the clinic and wave a quick hello every day she didn’t have a cigarette. Because our clinic staff was so accessible, we were an easy resource for her and we could help hold her accountable. With her continued success, her husband soon decided that he wanted to make a life change as well and utilized our clinic to help him to quit smoking. With the couple successfully quitting smoking, an unplanned yet monumental outcome happened. About six months after we implemented the plan, both patients came to the clinic with their nine year old son. Their son came in for a camp physical and there was something unplanned and new for this young boy; he no longer needed his inhaler as his asthma had subsided. Essentially Mom and Dad quit smoking and their son was also a major benefactor from their decision to be more healthy.

Can you tell our readers a bit about why you are an authority in the healthcare field?

If there was a main ingredient in labeling someone as an authority outside of experience, I’d say it’s passion. I have a passion for disruption in an industry that is in dire need of it. I want people to understand that the status quo can change.

The truth is that healthcare is a very complex industry- it consumes 20% of our economy and is single-handedly the largest employer. Based on the sheer size of the industry and the complexity and multiple ways in which we fund it, healthcare looks and feels like a maze to the everyday consumer. We focused our energy on removing what we had identified as five barriers to healthcare, temporal (time), geographic (distance), relationship (trusted clinician), knowledge, and cost. An employer based clinic tackles all of these barriers at once; we bring the clinical team directly to the workforce and impart solid clinical information directly to patients. By removing middlemen, we do not have co-pays and the medication provided is at no additional cost to the patients. I think any organization, large or small, that actually does put patients and not payors first should be viewed as an authority in the field.

What makes your company stand out? Can you share a story?

I take great pride in the fact that NeoPath Health really is a boutique organization. We enjoy customizing down to the smallest detail to make sure our clients are satisfied with not only the healthcare experience, but also working with us to create that experience. One size does not fit all, and if we have an interested organization, we will take the time and listen to their needs, gather information to truly understand their organization, and build a model that is rooted in that company’s culture.

A few years ago we had begun working with a new employer- the type of company that is the largest employer in the county. Because of this, community relations are very important. They asked us to have a meet and greet with the local hospital to make sure the hospital wasn’t offended in anyway for our client making the decision to work with us. We had the meeting and all was well. Fast forward 2.5 years and we receive a call from that local hospital as they would like to have a meeting with us. We are now implementing an employer-focused healthcare delivery model for the employees of the hospital. It was a great compliment to receive that our innovation was recognized and we now have a new partner. It was also a reminder that nobody, not even those in the delivery side of care, have immunity to the rising cost of healthcare.

Can you share with our readers about the innovations that you are bringing to and/or see in the healthcare industry? How do you envision that this might disrupt the status quo? Which “pain point” is this trying to address?

The innovation here is that we are working outside of the well established system. A system riddled with unhappy doctors, co-pays, deductibles, confusing networks. We dissolve those issues and make the process as easy as possible for patients to engage in. We have spent the latter part of three decades creating obstacles for patients to receive healthcare, and we are now at a tipping point where delaying care doesn’t save money. Granting timely access to primary care is going to make the several thousand dollar claim of tomorrow disappear today at a much lower price point.

The status quo of today is heavy reliance on outside sources that really aim to control your premium dollars, and where they are spent, there’s not a whole lot of choice. Speaking freely, the referral a patient receives to specialty care is largely driven by external financial factors. The insurance companies and large systems all want control of that. I do believe an onsite clinic places the referral power back into the hands of the patient-clinician relationship. We do not receive any form of income from external groups.

I think what we achieve in this process is a mindful approach to aligning employer patient needs. We will not suppress relationships with the broader healthcare system, but our desire is to engage with specialty on an as needed basis. The current state of primary care produces about a 33% rate of referral to specialists. This costs both the employer and employee more money. Our referral rates are less than half of that as we are not driven by financial targets.

What are your “5 Things I Wish Someone Told Me Before I Started” and why.

1) The real value of time. It’s easy for people to get burned out in health care. As the leader of the company, it is my job to keep a pulse of the workforce. You want to do your best to make sure people enjoy the work they do, but also keep an eye on those that invest too much of their time. Set guidelines to protect your clinicians; these are people that provide care for a living and many times they will exhaust themselves in service. Even though the majority of our employees are salaried, I still implemented time tracking software. When I see data that is suggesting burnout is on the horizon, I will call them, talk to them about the hours worked, and let them know that I’m aware of their remaining PTO balance. Nine times out of ten, the conversation ends with us opening up a calendar and helping them find time to relax.

2) Goals and dreams can become infectious- people will work hard if they have a mission. One of our nurses had her five year old son spend some time after school in one of our clinics. He had a brand new dinosaur backpack, and he made sure all of us knew how proud he was of it. His mother, who had recently received a raise, stated that she was able to purchase her family a few more gifts referencing the backpack. She is great to work with and her raise is simply a byproduct of her work ethic and commitment to our mission. I found it funny that an elated, growling little boy is what it took for me to slow down and recognize the goals and dreams we set as a company have a broader impact than timesheets and spreadsheets.

3) As CEO, you are on an island- get use it, but get a Wilson. Every job has difficult elements to it, that is why there is a paycheck. Anxiety and stress are normal- how you deal with it is up to you. I decided to get a business coach and I recommend it. Find someone that you can confide in. There will be moments, information, and feelings that in no circumstance can you share with your coworkers, so work with someone on the outside that can guide you through rough water.

4) If this is your first start up business, the probability that your forecasts and assumptions on growth strategy are wrong is about 99%. Everything takes much longer than you think. If you are introducing a new concept, it will take years to establish credibility. I imagine that somewhere there is a graveyard with the names of startup companies on the headstones. In this country we romanticise entrepreneurship, but in reality, there’s very little romance when you are charting a new course. Without getting into detail, I recently reread my very first business plan for NeoPath Health. I had a good laugh because what you put on paper and what the market gives you often don’t line up.

5) Pay yourself. Too many times when in startup mode people will sacrifice their income for the company. I understand that, but it is not sustainable. If your quality of life diminishes, the company will soon follow.

Let’s jump to the main focus of our interview. According to this studycited 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?

1) Administration efficiency — Studies have shown growth in healthcare administration since 1970 has grown over 3000%. It is unsustainable to continue to add layer after layer- this directly influences the cost of care and the patients who fund it.

2) Health outcomes — This directly correlates to access. If we continue to hand the US worker higher deductibles and higher premiums, it will be looked at as expensive and not affordable, and they will avoid it. Delaying of care is imminent.

3) US is ranked poorly because perception relates to all of these. The US consumer has a perception that insurance is health and it is not. Insurance is a financial product solely designed to be profitable and to help prevent patient bankruptcy.

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) Currently there is a cap of 40,000 medical students granted residency per year. There are reasons behind this, but I would like to see a concerted effort of all involved to see the number of residents increase.

2) Medical School and the debt associated with it is significant. Many talented people are exploring other fields as they do not want a cloud of debt holding them back.

3) It will be beneficial to society if we support Direct Primary Care Doctors. Supporting Direct Primary Care Doctors will help foster independence and solidify the patient physician relationship.

4) Electronic Health records need to speak to each other. The world is changing and although some connectivity with EHR systems is taking place, the reality is most medical records are siloed and reside in a single system. Patients move from clinic to clinic, they cross state lines. Our pets and vehicles have better record keeping systems than we do. It needs to change.

5) Prescription drugs costs are out of control, and patients are rationing medication so they can buy groceries. This is detrimental to our personal health and detrimental to the US Healthcare system.

Thank you! It’s great to suggest changes, but what specific steps would need to be taken to implement your ideas? What can individuals, corporations, communities and leaders do to help?

1) Systemic overhaul of the residency process in the US is needed. Easier said than done but antiquated processes are slowing down the rate of physicians thus limiting access.

2) The cost we bear as a country is far greater than the sum of medical school debt. You graduate and practice as a physician — we wipe the debt out.

3) Pass HR.6311 — the Health Account Savings Modernization Act. This will allow patients to direct the use of HSA dollars at their discretion.

4) Mandate all clinical groups with electronic health records to join a national health Information exchange, and allow the data to move with the patient and not the system.

5) The US can no longer allow “market forces” to determine the acquisition cost of medication- too many middlemen in the industry adding costs. We need to take an honest and serious look at the Pharmaceutical Benefit Managers companies in this country and decide if they add value or not.

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 recommend, CEO’s Guide to Restoring the American Dream by Dave Chase. He sees both sides of the healthcare debate and presents ideas and concepts. I really enjoy his work.

How can our readers follow you on social media?


Thank you so much for these insights! This was so inspiring!

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