 So I think I should clarify in this audience. I'm not a real doctor like an econ PhD. I'm just a medical doctor so And I I do agree with one of the previous speakers that we should have let the economists rule the country over the last year They would have done a better job than the physicians did to be honest So I'm a direct primary care physician so I'm kind of living on the front lines with a lot of the things that you all have been hearing about today and so I'm really just going to walk you through our experience. I'm not going to talk a ton about our company specifically, which is big tree I feel like I'm more of an ambassador for direct primary care in general Somebody wants to take me out for dinner tonight I can tell you how our company is a couple steps beyond that and we can fix everything in the universe or at least health care But we'll save that for later. So this is more a talk on what DPC is and how it works. Okay I'm a doctor my medical school was a We saw a case studies for our educational process and so that's kind of how I think so we're going to walk through a case today And this is a real person. We're gonna call her Tracy So this is Tracy She actually came up to my mother at church and was asking my mother's advice who is not in health care Has no idea Which of her medicine she should stop taking because she couldn't afford them Okay, she's a type-2 diabetic. She has high cholesterol and hypertension And I simplify this quite a bit. She was a little bit more complex than that She has about a $3,000 deductible and a $15 generic medicine co-pay and Her co-pay on branded Doug drugs is 30% all right she is a Lunch lady at a school. Okay, so she makes $11 an hour, which is in her county the median income Right, so half the people in her county are poorer than that. Right. So this is her reality in the first little column these are types of services she gets and then the next column is The contractual price with her insurance carrier, which we work with so I could actually know those prices and then this is her the next column is How much she was paying and then the final column is how much her self-funded health plan was pay? Okay, and then we'll transform that once she joined big tree in a second So the first she was paying three hundred thirty five dollars every three months for visits to a cardiologist and an endocrinologist She was paying 125 dollars once a year to see a primary care provider twice a year. She went to urgent care $250 a pop. She had $115 every three months in lab costs and then she had a hundred and forty five dollars for her oral diabetic meds $47 a month for her hypertension medicine and $330 a month for her Jardians, which is a branded diabetic med. Okay And you can see how much she was paying for those which is basically $388 per month, which is I think in the next slide Yeah, so it's 32% of her disposable after rent income was going to her medicine on a monthly basis Okay, so she's a single mom and she was trying to figure out how to afford her kids going to college And so that's why she was trying to figure out which med to dump okay, so Big tree is a direct primary care clinic, which means that we receive payments directly from Patients usually is a monthly fee And then that just puts us on your team so then we get to be creative and help you solve your problems and help you lower your costs and We like that as doctors because I'd rather my creativity go to helping you figure out how to get better care for cheaper Then to going to figure out how I can hack the insurance billing system to get a level five instead of a level four out of that 15-minute visit which is how I used to play the game so when Tracy joined big tree her net result was that her Total cost went down to about 10% of her disposable income so we did that by Several factors and that's kind of what we're gonna go through step by step But on the first one The three hundred thirty five dollars every three months for the hypertension management and the diabetes management, you know I was in medical school. I Was really it was flabbergasted as at least half the time when I was following a cardiologist or an endocrinologist or a gastroenterologist around I Couldn't fair why the patients were there And I I was so I asked one of them, you know Why on earth is this person on two hypertension meds seeing a cardiologist? Cardiologist said I don't know but they're quick and easy visits for me So I just see him and bill him right and what a lot of primary care doctors do like myself is If the person gets a little bit complicated or God forbid they want to ask about two questions at the same visit Well, you pun them off to a specialist, right? Because I've got a waiting list months long to come see me So I just need to keep the easy people and if it gets any complex at all It's him to the specialist Specialists don't mind because those are quick and easy visits for them and they get to bill higher prices because they're usually part of a monopolistic health system and Everybody wins right? Except some like Tracy So we manage those in-house, right? So those costs disappear for her. All right and So her net result is she drops from three hundred eighty eight hundred and twenty five dollars now If you do all that math later on which I'm gonna go fast You won't be able to you'll notice the numbers don't add up Okay, and there's economists in the room so they're gonna catch on to that And that's because of something called rebates And if you haven't got to play with the pharmacy benefit managers and rebates We could talk about that over dinner too, but that's a whole nother conversation But it always works as one plus two equals 12 Okay, so why primary care? Why monthly payments? Well in a fee-for-service health system Payments are for a service. So if you come into my office, I'm a pediatrician by training So you bring your two-year-old into my office. I look in their ear. I see a cutotitis media I prescribe you a moxicilla and that's a 99213 or a 99214 those are the CPT codes and I have a contractual rate with each payer for a different amount It might be as low as twenty five dollars if it's a managed Medicaid or up to a hundred and fifteen dollars if it's a Pair that does not have a lot of market power. Okay Now my job then is to figure out how to get that number as high as possible Right so I can make more money. Of course doctors don't do that Except they do right office managers today, so Really though primary care is not about that primary care It's about access continuity and responsibility And we see this it's about access because if you get sick tomorrow You want to be able to go to see your doctor and get care It's a crazy concept in my community My sister-in-law is a primary care physician and for a major health system And she's allowed one slot a day for people who call in sick Right, why would they do that? Well, because if the health system sends that same patient to urgent care where they see a nurse practitioner So lower cost structure and they get to bill more because it's that urgent care They get to make more money. So they purposely limit the number of primary care providers so that they can make more money off the urgent care system So primary care is about access, but if you want access you have to pay for it Right, so if if I save slots open in my book so you can get in when you need to get sick That means some days those are not going to get full So if you want to be able to get in when you need sick, I need a payment to make that happen So that's why we like monthly fees rather than straight fee for service. Okay, primary care is also about continuity In the billing system a 99214 just like an office visit is The same whether you're seeing me or one of my partners or one of my partners partners or my partners partners partners Who you've never even heard of we could pay it all the same So there's no compensation for seeing me again There is actually increased compensation if you go see somebody new because then they get to bill a 99204 Which is a new patient. So the incentive structure is for you never to see the same person twice Okay, so again if you want continuity Well, you do have to pay for that right you guys are all good Austrian economics people so you want to pay for that and so that's a monthly fee again This is why I like monthly fees finally Primary care is about responsibility We all know this is true because if I send somebody with chest pain to see a cardiologist He has a few tests. He sends me a letter and says I don't know what it is, but it's not the heart go see who Your primary care physician Okay, well, you realize there's no way that I get paid for that for holding that responsibility Right, so if we the system is designed for the urgent care to proliferate and primary care to die So that there is no access continuity or responsibility So the solution we believe is a monthly recurring fee For me to be on your team Okay, now what's really cool about that is that allows me to be creative and so some of the ways that we've been able to be creative I'll get back to us being creative in a second So there's several models on how this is happening right now in the marketplace. Okay, so the first one Is the MD VIP model so you may have heard this called concierge medicine Okay, so concierge medicine and direct primary care. We like to think of those as different MD VIP is kind of a quintessential concierge medicine typically concierge medicine Those physicians have about 300 or so patients on a panel and they typically bill well in excess of a thousand dollars per year for Access and then they also bill your insurance fee for service on top of that Okay, so the the fee is just to get you in the door Right that does allow those doctors to have a smaller panel. So they're longer visits But in general it's the system you're used to except you pay extra so that that doctor limits their practice Okay, then there's groups like one medical which is publicly traded under O N E M I do definitely hold shares in that Though I don't give financial advice either so those Practices usually have about 800 or so patients per provider They bill a small fee for access about $200 per year and then they bill fee for service And I stuck a little asterix on there because what they actually do is they go into cities and they contract with the most Monopolistic health system in the city and they'll typically get extremely high fee for service rates something on the order of $350 for an office visit So it's a very profitable system But it's really just a slight extrapolation of the old system Then there's kind of the federation of Independent DPC people okay, and I kind of fit into this group a little bit There are some in every one of your towns. There's about 1500 of them in the United States DPC frontier is a website you can go to and look up where these people are and They'll generally charge about 60 to 125 dollars per month for unlimited care And they have a limited practice about 800 to 1200 patients when I was in private practice I had 2,500 patients on my panel just for context So then there's a more corporate side. So there's a private equity backed company now called ever side It was originally called Paladina and they merged with the other two larger players in the United States last year And they'll charge in the thirty nine to seventy dollar range and it's designed to work with employers Okay, so big tree which is my company. It's kind of halfway between those last two groups And then finally there are several of these companies gone public recently And they are Medicare Advantage plans who have a direct primary care Emphasis and I or a health is kind of the one that I think up here But there's others that have gone public recently to last week one medical and I or emerged Interestingly enough, so there's a lot of activity on the VC and private equity side in this space And I expect to see a lot more Okay, so is there data on this you guys are data people. Yes, there's data on this So the Society of actuaries published a report last year Where a Milliman? Sponsored study on direct primary care and what they found was that the total cost of care on a per member per month basis went down by about 13 percent okay, and That was on a risk-adjusted basis How did that happen? Well, this is the you know the fancy graph from their slides But look at the arrows. So one is their emergency department utilization went down by 50 percent they also saw a reduction in their urgent care visits and In the physician primary care specialist visits, all right And that was not statistically significant in this section that we find it really meaningful The statistics can't tease it out because you build the same codes whether you're a specialist or non And so there that really should probably show an increase in the primary care visits and a decrease in the Specialist visits in our experience. It's been pretty meaningful So back with Tracy So we eliminate her Office visits to specialists we eliminate her urgent care a group that's been with us for a year had zero urgent care Visits in the last 12 months Right and saw a reduction of $700,000 in their total medical spend for a group of 200 people Which is pretty pretty fun And her primary care cost she was on one of our virtual plans So we don't have we didn't have an office in her community So it was all over our app and it was $44 a month was her cost to get her our services So the other thing this does is it creates the ability for us to be creative. So this is her lab cost and So the quick story on this so we were Very beginning Like a good Austrian economics person. I said I wanted to know how much these things cost So I can tell my patients what their labs cost So I called around and none of the hospitals would tell me what the labs were going to cost They refused to tell me right so quest Sent me a packet in the mail. So I open the packet and it has a contract in it Sounded it was very odd. I start leafing through the the list and they just seem way way too cheap and So I just sent a patient for a lipid panel and it was $77 so I flipped over lipid panel and it said $2 and 42 cents and So I I called the quest rep up and I said I I don't really know what what this packet is I wanted to know the cash price list and she said, oh, yeah, sorry. I was I sent you the wrong list And I'm like well what list did you send me right and she says That's our client pay list Like I'm just a doctor. I don't really know what client pay list means She's like, oh, well, that's if you pay on behalf of the patient. That's how much we charge you Really, I said, well, how much do I have to charge the patient? She's like, oh, it's great. You can charge him anything you want to I'm like All right, I'd like to sign that contract. So We sign the contract and a complete blood count at Big Tree is $2 and 42 cents Okay, and so then I just pass that on to the patients, right? So this was a this is an actual patient She was in one of our rural communities She had an allegiance to her hospital and said I want to go to the hospital to get my labs done And we said you don't want to do that and she said I believe in this community and for this community Week later. She calls us back yelling at us because she had to pay a hundred and eleven dollars for her three lab tests and She got a complete blood count complete metabolic panel and a thyroid stimulating hormone level Okay, super normal tests. She's equal. Well, how much would have been if I went through Big Tree? $11 Okay, $11 so the markups on these things so those were those three tests So they had a markup of 800 percent six hundred percent and a thousand percent on those tests Okay, it's crazy. That's like buying a 10 cent hot dog at the ballpark for a hundred and fifty dollars All right, that's that's kind of what that translates to So but that's what so we have clinics and we have virtual only clinics in 26 states And we have those contracts then in all those states so that our patients can get those lab prices in those in those places The pharmacy section is more interesting though if you all have not done a deep dive into pharmacy benefit managers You all would love that that's such an educational experience, especially if you have a lot of hard liquor involved So the we're gonna go into that because it's worth it briefly so this is A list of six common medicines. Okay, some of the top 50 medicines prescribed. I'm sure many of you in this room are on some of these meds With the number of annual US prescriptions there in the red circle and the average retail price Which is a completely meaningless number. Okay? Now below that in the first of the graphs are the actual cost that a local pharmacy benefit manager was charging for those drugs So when we started big tree, we were buying an exam table I was searching around and the person I was buying them from a Kesson actually had drugs And so I started looking at the actual price of these drugs, which I'd never seen, you know, I'm a doctor I don't see these kind of things and it was appalling And so we looked in to see if we could actually start buying drugs and Dispensing them directly to our patients and Missouri actually has a law that allows that some states do we scaled it up And now we actually own our own pharmacy and then we just charge the patients the actual cost of the drug Okay, so look at this so a month of low sartan is two dollars and ten cents a Month of a tourist at and is a dollar eighty the PDM was charging twenty six dollars for it Prozac was sixty cents a Z-pack is two dollars and forty cents a round of augmentin is five dollars we had this lady that's intermittently homeless that one of the social service agencies brought to us and She was just got out of the psych ward and they took her To the Walgreens to pick up her drugs and it was gonna be one thousand one hundred dollars for her Anti-depressant and an atypical in a psychotic. Okay, we got them for six bucks Okay, that's a meaningful thing in her life right six versus eleven hundred dollars So we just charge them costs and for our corporate clients. We just throw in all the generic meds for free Okay, because they're so inconsequential in their costs that it's we just do the sales tactic Okay, and then last one is the Jardians and this one's the one it's a little bit complicated But you guys are econ people so you you should enjoy this. All right, so what is Jardians? Jardians is a diabetes med That has been demonstrated in research to also lower your risk of cardiovascular disease, right? Super great Costs about three hundred thirty dollars a month if you got a good discount close to eight hundred if you don't so Why do we use it? So this is the actual graph that comes from One of my texts on how to pick a diabetes med. All right, so we're gonna walk through it step by step just kidding so The important thing for you guys to realize is over there on the right. You see a circled thing if you can't read it It says Cost is a major issue Okay, so you part of the decision-making tree is is cost an issue right so all the stuff on the left is if cost is not an issue, right and It's cost not an issue. Okay, so but look at the difference if you go on the cost is an issue side It's a dollar eighty for step one and twenty five dollars a month for step two If you go on the cost is not an issue side It's seven hundred and thirty six or five twenty nine for step one you get to choose and then you do the other one for step Two and then step three is three hundred and thirty six dollars a month. So when I'm talking to Tracy I'm a doctor not an LPN at an insurance company, right making these decisions, which is how it actually happens So I said to Tracy. I said Tracy. Do you know why I would choose the left half of this versus the Cost is an issue. She said no, I said well the only reasons because one study showed that Jardians Decreased the risk of people with prior heart attacks on having another heart attack by 1% And she said well, I've never had a heart attack. I said I know so I'm guessing it might decrease your risk of having a heart attack By maybe point two five percent and it's costing you a hundred dollars a month not to mention your payer an extra $200 a month. She's like, well, why in the world am I taking this and I said I have no idea And so she stopped it and we used the $25 a month option and in the end she went from paying $338 to just under $100 a month Was actually her cost and that's a meaningful life-changing experience for her, right? She's making 11 bucks an hour scooping, you know fries to kids, right? Why an earth fully insured mind you Okay, so this is the power of direct primary care. It puts me on your side I get to be creative and solve your problems not figure out how to game the system. Okay, so Last slide is a DPC map So it looks like there's a bunch of us out there This is all of them in the country, but that's actually about 1500 clinicians Which if you assume about a thousand people that's enough to care for about 1.5 million Americans Which is not enough. Okay, so that's why big tree exists We're trying to scale this up and we're having a lot of fun doing it But I really think this is the core for the future so if we want to do cash by health care This is the core to solve the problem So thanks for your attention guys