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EXCLUSIVE INTERVIEW: Healthcare Entrepreneur Solicits Family Offices, Others, To Finance Remuneration Revolution

A complete change in how healthcare professionals such as physicians are paid is part of how the US will wrestle with surging costs, an entrepreneur and veteran of the sector argues as he taps family offices and other investors for backing.
Politicians may butt heads over whether the US Affordable Care
Act represents progress in putting health insurance into the
hands of all Americans or whether it adds new costs and an
unwieldy bureaucracy. What doesn’t appear to be in doubt is that
credible ways to curb costs without jeopardizing care are going
to be in high demand.
This is the terrain on which a nascent firm by the name of HExL
aims to build its business. Founder Richard Kimball, also its
chief executive, champions new technology to drive down costs and
advocates restructuring how physicians get paid, so it is
results, not just the number of times a person sees a doctor or
has a medical procedure performed, that drives physician
compensation.
His business is seeking investments and among the groups targeted are family offices, which Kimball sees as having the long-term time horizons ideal for this area. A 25-year-plus veteran of healthcare innovation in the health sector, including time at firms such as Goldman Sachs and Morgan Stanley, Kimball recently spoke to this publication about his business.
“The objective [of HExL] is to empower health practitioners in
how they practice medicine….this is about to change from a
fee-for-services system towards one where physicians and
hospitals are paid for outcomes and value, not volume,” he
said.
Kimball's firm pushes for the adoption of new ways to reimburse
physicians and other healthcare providers that is both
standardized and focuses on results.
“HExL’s business model is primarily built on charging a 'gain
share' on the improvement in physician revenues. HExL will
provide capitated contracting for physicians and the care
coordination technology to manage their patients. If a
physician’s practice increases net revenues by, say, $1 million,
HExL will be paid 30 per cent of that $1 million or $300,000. The
physician will retain 70 per cent of the incremental net
revenues. HExL will also charge a set up fee and an annual
software licensing fee,” he said.
Kimball is a champion of what is called “telemedicine” or
“telehealth,” which he has described in an article as the use of
communications technology to exchange information between
patients and medical professionals in different geographic
locations. Such approaches facilitate more ongoing treatment of
chronic conditions from home, rather than involving the
significant expense of hospital visits. As transparency on
different treatment alternatives, cost and quality begins to be
more available, consumers and patients will become more
discriminating about healthcare and open to new modalities.
(There are clear parallels with the price-comparison technologies
now ubiquitous in sectors such as travel, hotels, consumer
electronics and autos, for example.)
There are a number of firms applying technology and other forces to changing how healthcare is delivered in the US, with the hope of containing costs, being more flexible in delivery, and challenging the transactional payment model and championing professional results-orientated stategies instead. One example is Amplify Health; another is One Medical Group, a direct primary care group that, among other features, uses software and other technologies to track patient outcomes as well as treat patients in the home or at work. (All these firms have subtle differences for the purposes of comparison.)