…I’d radically simplify the work providers need to do to get paid or deliver care. The explosion of payment rules and different quality programs for each payer are making it impossible to tick every box. The house of medicine needs to agree on a select number of well-proven quality measures and move away from requiring minutia. An article in Health Affairs estimated that medical groups spend up to $40,000 per doctor per year on capturing quality measures. Hospitals have hired squadrons of clinical people to capture quality measures on inpatients. Add to this the work doctors and groups spend on pre-certs, prior-auths, and every other phone call, it’s a wonder anyone wants to be a doctor anymore.
Ihad the pleasure to interview Todd Rothenhaus, M.D.. Todd is the CEO of Cohealo, Inc. the first company its type to bring the sharing economy to healthcare. Cohealo enables hospitals to share medical equipment — lasers, surgical tables, specialty beds — in much the same way companies like Airbnb and Uber match consumer demand with underutilized capacity. Prior to Cohealo, Todd was the SVP and Chief Medical Officer at athenahealth, where he served in several leadership roles. Before joining athenahealth, he was Chief Information Officer of Steward Health Care, the largest community-based health system in New England, and an attending physician in Boston’s busiest emergency department. He received his M.D. from the George Washington University and a B.S. in Biomedical Engineering from Tulane.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
Istarted college majoring in aerospace engineering. Unfortunately, though aerospace was booming, just about every job was figuring out how to blow things up or shoot things down. It wasn’t a good fit for me. At the time there was this TV show called “St. Elsewhere” with Howie Mandel playing an ER doctor. I decided to go to medical school and ended up managing a bookstore while I took the pre-requisites necessary to apply.
Long before Amazon and even Barnes and Noble, we were one of the first bookstores in the nation to computerize. We doubled our sales and quadrupled our inventory turns in the first year. While I ultimately left for med-school, the job showed me the power of technology. Since leaving the bookstore, I’ve worked as an emergency physician — in the same Boston hospital depicted in “St. Elsewhere” — as the chief information officer of a health system, and then chief medical officer at a hyper-growth healthcare IT company — always straddling both technology and medicine. The intersection of the two has always excited me.
Can you share the most interesting story that happened to you since you began leading your company?
Cohealo enables hospitals to share medical equipment between facilities, decreasing the need for redundant purchases while improving access. In a world of diagnostic AI and drone-delivered pharmaceuticals, optimizing medical equipment may not be sexy, but we are solving the toughest problem in health care — saving money.
Recently, a customer site made a last-minute request for an ultrasound machine — their machine had been found unresponsive the morning of a case. Without a replacement, they would either need to cancel the case, or rent the equipment for a fee. Cancelling a case is the ultimate fail in the OR. At best it’s a huge inconvenience to the patient, at worst it could lead to a bad outcome. If you rent equipment, these fees monopolize most of the margin from reimbursements.
Out team was able to find an available ultrasound as a sister facility and move it within 24 hours. Good thing we did, because less than three days later, another ultrasound was broken at a nearby medical office building.
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?
When I worked in the bookstore, I completely blew away our backup tapes. We had to re-inventory the whole store. Everyone was angry with me and it cost the boss a ton of overtime. It weighed heavily on my 22-year-old mind for months. Years later, I’d realize the stakes were much higher bringing computers into the clinical arena. The early years of electronic health records were frankly quite dangerous, and I think the industry did a lousy job acknowledging what was euphemistically called the “unintended complications” of early information technology in health care. One of the things that attracted me to Cohealo was the attention to detail. In 2,500 moves we’ve never been the cause of a canceled case, and we have only had to pay for a repair once.
What do you think makes your company stand out? Can you share a story?
Cohealo’s biggest differentiator is how much money we save our customers within the first year of working with our team. An early champion of Cohealo has been a urologist at Kaiser Permanente in Southern California, who purchased a lithotripsy machine, a $500,000 piece of equipment. Being a good steward of Kaiser’s money, this urologist was searching for a way to improve the ROI on his investment by sharing with other hospitals in the region. Lithotripsy is a non-operative way to treat kidney stones that is safer and lot less painful than other clinical approaches, so it was also about bringing the best technology to as many patients as possible.
Kaiser calls savings from Cohealo “dark green money”, which are savings that are immediately quantifiable. Cohealo’s math is simple yet powerful. Buy one piece of equipment for three facilities instead of three pieces of equipment for three facilities and you save the cost of two pieces of equipment. Add to that the cost of service contracts and preventive maintenance and you’ve freed up both capex and opex to balance the health system budget or fund new lines of business. Lots of technology in healthcare is sold under the promise of future savings — money you’ll eventually save in 2–5 years. It’s not that those types of savings aren’t also important. Think of all the money ACOs are pouring into diabetes and other chronic diseases in order to save money downstream. Don’t get me wrong, it’s the right thing to do, but hospitals need to save money now, urgently. They are closing at a rate of 30 per year, leaving patients in rural areas vulnerable. Sharing equipment can help.
What advice would you give to other healthcare leaders to help their team to thrive?
The best advice I would give is that culture eats strategy for breakfast. Having worked for two mission-driven non-profit health systems, as well as the most zany, hyper-growth for-profit tech company in New England, I can honestly say that the for profit was not only better at execution, but also a better place to work because it had such a good culture.
For hospitals and health systems, there is a duty and honor to put healing first, but we forget that healers are people too, including the support staff and administrators that make the work of healers possible. The hospital is a tough lens into humanity for everyone who works there. Unfortunately, the mission-driven tradition of healthcare is no substitute for a good corporate culture. If you want to make a dent as a leader, you need people to get things done. Productive employees are those that love coming to work. It’s a simple idea, but really hard in practice.
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?
The care in the United States is some of the greatest, but it suffers because it is so unevenly distributed. If you are living in my town, Boston, and seeking the best doctor for brain surgery, you have dozens of options. However, at the other end of the spectrum are people who can’t even access care, or who are afraid to access care because they know an ER visit will bankrupt them, so things fester — literally.
Secondly, our focus remains on “the visit”. The fallacy is that for some reason we expect the doctor to address every issue during an annual exam or a monthly visit that is 15 minutes in the office. Worse, we expect the patient to make personal change — lose weight, eat better, take your insulin — based on recommendations made in the last 30 seconds of that visit. It’s so ludicrous you can almost see the death from disruption of primary care. We are seeing new models emerge, but we better hope that the shift from fee-for-service to value-based reimbursement continues or the whole experiment will unwind.
Lastly, care suffers because there is too much emphasis on technology and not enough emphasis on actually caring. The bias is created by the hospitals themselves. Everyone wants to deliver cutting edge services. We see this in our clients’ equipment purchases. There is a literal arms race to have the latest and greatest lasers, guidance systems, robots, MRIs etc. In many cases the technology improves outcomes, though not all the time. The DaVinci robot is a great example. Despite not making a drastic difference in outcomes, new technology slowly becomes the standard of care. New residency graduates end up depending on this technology to do all their cases, not just the cases where the technology has been proven to make a difference.
Technology is great, but it accounts for most of our rising costs. We need to accept the fact that health care is low margin, unglamorous activity. Sure, blockbuster drugs for rare diseases and surgical robots are cool, but two nurses driving around town to make sure homeless people are taking their TB meds makes more of a difference than the robot ever will. Venture investors are just beginning to realize this, with investments in opioid dependence, behavioral health, and social determinants of care. I’m excited to see those, though I don’t think they will make a lot of money for their investors.
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.
First, I’d make Medicare available to every adult. I’m not saying Medicare for all, just that insurers should have to compete for beneficiaries with an established low-cost payer. There are 6,000 insurance carriers in the US with gold, silver, bronze and lead packages. Consumers are hard pressed to find differences in them. It’s like picking from 30 jelly flavors when the classics — strawberry or raspberry would do. Patients can’t make the decision, so their boss does for them, and the insurance companies end up needing a sales force to close deals. This ultimately raises cost for everyone.
Second, I’d accelerate the move to value-based care. It’s fueling innovation from new medical practice models to digital health. The challenge is figuring out how to reward each organization or individual who contributes to the care of the patient. We have a long way to go to get everyone at risk for medical costs. Pharmaceutical companies, laboratories, diagnostic centers should be paid by value delivered, not just primary care doctors. It’s even tough for the PCPs. When I was seeing patients, my group paid me on my productivity. Under risk, it’s harder for a doctor to know how to spend their time. Should I rush through 20 patients today or spend an hour or two with a diabetic, to potentially avoid a hospitalization?
Third, I’d radically simplify the work providers need to do to get paid or deliver care. The explosion of payment rules and different quality programs for each payer are making it impossible to tick every box. The house of medicine needs to agree on a select number of well-proven quality measures and move away from requiring minutia. An article in Health Affairs estimated that medical groups spend up to $40,000 per doctor per year on capturing quality measures. Hospitals have hired squadrons of clinical people to capture quality measures on inpatients. Add to this the work doctors and groups spend on pre-certs, prior-auths, and every other phone call, it’s a wonder anyone wants to be a doctor anymore.
Fourth, we need to get a handle on our workforce needs. Health care is one of a few industries, like construction and education, that has massive negative labor productivity. Personally, I’m not sure there is a physician shortage, but I do know that doctors spend way too much time doing things that other people could do for them. High performing, physician owned, specialty groups understand this better than most other groups. The surgeon sees up to 60 patients on a single day of the week (they operate on patients the other days) and while it’s hard work, they have physicians’ assistants, nurses, techs, and other members of the care team do all the work. Primary care physicians deserve the same, but the reimbursement does not support it — at least not in a fee-for-service world. Asking doctors to do work that can be completed by another member of the care team is not just a waste of money, it’s leading to an occupational health crisis.
Finally, we need to get a handle on the amount of money we spend on technology. Drug companies and every supplier need to go at risk with the doctors and hospitals. For example, why does a drug that is 95% effective cost the same as a treatment that is 20% effective? But that’s what happens in cancer care all the time. The same is true for devices. If patients get an implantable defibrillator and it saves lives only once every couple of months, should the device manufacturer get the same revenue? Data from our platform shows that the vast majority of surgical capital equipment sits idle up to 90% of its useful life, yet the health system was forced to buy one for every site they offer the service. As care moves out of the hospital to ambulatory surgery centers, and more and more procedures are can be performed right in the office, how can health systems keep up?