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Joe Caruncho of Genuine Health Group Discusses Value-Based Care

Joe Caruncho


Genuine Health Group

For Media Inquiries:

Meieli Sawyer, The Weinbach Group


Interview conducted by:

Lynn Fosse, Senior Editor

CEOCFO Magazine

Published – January 24, 2022

CEOCFO: Mr. Caruncho, what is the overall vision behind Genuine Health Group?

Mr. Caruncho: I will take you back to my prior project of which Genuine was sort of an outgrowth. In 2002, I founded a company called Preferred Care Partners, which was a Medicare Advantage plan; a health insurance company for seniors who qualify for Medicare. It grew statewide throughout Florida, and then in 2012, UnitedHealthcare, who wanted to strengthen its position in the South Florida market, acquired us.

When I thought of the vision for Genuine Health, it was partially an outgrowth of things that I wished I’d had in our toolbox at Preferred Care Partners, but that I did not have because we were the insurance company, so we were one step removed from the patient. At the same time, there was a huge shift in Medicare and the healthcare industry. The healthcare industry follows what Medicare does, and Medicare was quickly changing the way doctors are paid from the system called “fee-for-service.” Fee-for-service, which we also call “fee-for-volume,” means that the more services doctors prescribe for their patients, the more money they make, without regard to the patients’ outcomes. By contrast, value-based care, which we call “fee-for-value,” pays physicians for patient outcomes, quality, and reduction of avoidable medical costs. This is regardless of how many services a doctor does. If their patients have better health outcomes (meaning if they keep them healthy), they will make more money.  

The HMOs like my former company needed to get into this new value-based care area, and the doctors needed to do it because they were being forced to. But there was no bridge between the two of them because the health plan was too far removed. The doctors also do not have the expertise, capital, or analytics to make the transition to value-based care. So Genuine was intended to be that bridge. We would contract with the doctors on the one hand, and with Medicare and the healthcare plans on the other, and then we would do all the work enabling the doctors to focus on providing high-quality care. We would invest in the analytics, teach the doctors how to manage and bill for services, show them where the money flows and how it can be wasted, and the ways to increase quality while lowering avoidable costs. We think of ourselves as a single point of contact, a one-stop-shop for physicians to successfully make this transition to value-based care, which is the future of healthcare.

CEOCFO: What are some of the challenges in changing the mindset of doctors?

Mr. Caruncho: I actually talk about that all the time. We just had a dinner meeting for one of our physician groups with about 35 physicians. I referred them back to the first time I talked to them about value-based care three years ago. At that prior meeting, I had told them they needed to change the lenses through which they view the financial side of the practice of medicine and adopt a new paradigm. What I mean by that is that, from a financial standpoint, these physicians have spent their careers trying to maximize the portion of the 15% of all healthcare costs that goes to primary care rather than focusing on the whole pie…100% of the healthcare spend.  

Now, all of a sudden, they are responsible for 100% of the healthcare dollars, but they also can share in the savings of managing that 100%. If they do it correctly, the upside really dwarfs any incremental income that they would get by billing a little more for this or that. It is about convincing them to take their eye off the 15% and put their eyes on the 100%, and then working together to ensure high-quality, cost-effective healthcare. If your patient needs something, let’s do it, but we will show you where you can do it most cost-effectively.

CEOCFO: Would you give us an example of how that would play out today?

Mr. Caruncho: Physicians frequently refer diagnostics. If you need an MRI, you will frequently go to the hospital they are affiliated with. In a lot of cases, they are in the medical office building next door, so it appears very convenient. Doing that MRI at that hospital setting might cost four or five times more than doing it across the street or two blocks away at an independent diagnostic center. Many of the independent centers have concierge check-in and other services that actually make it a more convenient option for the patient. So, we walk our physicians through those factors, and demonstrate that, by taking a little time to educate their patients, they can provide convenient, high-quality care at a fraction of the cost. Plus, they share in those savings. Literally, doing well by doing good!

CEOCFO: Ultimately doctors are paid for the quality of care and the result. How does a doctor go from ordering a test because the patient has coverage to “is this really necessary for the overall outcome”?

Mr. Caruncho: It is part of the same paradigm. A lot of times, the physician does the MRI instead of something more cost-effective that would get the job done. Part of the reason is they do not want to get sued for malpractice if something goes wrong. But other times, it has to do with pressure by the patient for the “best test,” and the physician has traditionally not had an incentive to push back on the necessity of the test.

I mentioned analytics before… it is how we show them in understandable terms what is at stake. We are stewards of this money that Medicare pays from all our tax dollars, so on an idealistic basis, we should do it just based on that. However, also from a financial business standpoint, it requires you to engage with the patient more. Many doctors have been trained to engage more frequently in things that will translate into fees paid to them by Medicare (or the insurance company), and to shy away from the other decisions that did not traditionally impact them financially.

We are up to about 300 primary care physicians that are part of our network, and we meet with each of them once a month. We require it, or we do not affiliate them, because, without the engagement, the formula does not work. Once we engage them, we show them the analytics. They share in the savings which we call Genuine Rewards. We say to the doctors, if you engage and do these things, we will share the resulting upside with you. You engage them with the information, but you also align them with incentives. That way, they know what is financially beneficial also provides better outcomes. It’s a real win-win for them, the payer, and their patients.

CEOCFO: Would you tell us about the acquisition of PreventiMed and what that adds to Genuine Health?

Mr. Caruncho: I self-funded the company since we started it in 2017. We finally decided now to raise some capital to do acquisitions such as PreventiMed. This is a very well-run physician-owned company. These are doctors that decided to make this shift to value-based care on their own instead of joining someone like us. They are profitable, and they have several thousand members under their management. I view acquisitions as a way to provide something I do not have: leadership gaps, infrastructure, or growth. From a revenue perspective, PreventiMed adds about $43 million annually, several million in earnings, and almost 3,000 Medicare members. We have analytics and a broader platform because we are larger, and we believe we can add additional value to what they are doing already. There is additional value in that we are buying them at their current stage in development. They have, for example, additional physicians that had wanted to join them, and they had held off because they thought that they might not have the bandwidth infrastructure to bring them on. In partnering with us, we can do that.

Finally, I mentioned plugging a gap. The physician leadership there is outstanding, particularly Dr. Charles Yanes. He is someone I am very impressed with because he took the lead initially on developing the company. I view him as becoming an integral part of our leadership team as we develop. In the industry, we call it peer-to-peer leadership. To your earlier question of how to get the earlier doctors to engage and change, there is no better way to do that than to have a physician that they respect on their level tell them, “Look, I used to think like you do, but I took this plunge. Look at our results from a quality and financial standpoint.” Therefore, we are excited about having that peer-to-peer leadership to augment our team.

CEOCFO: How do you show results and what has changed in your approach over time; what have you learned?

Mr. Caruncho: One of the things that has changed dramatically in the last few years is technology. That has allowed us to engage the physicians and provide that information in a way that was not even imaginable in 2012. You can slice and dice data and do predictive modeling, and a lot of the things were not available then. But what I also learned is that there were some physicians who wanted a paper chart, and there were others that wanted access to our actual database. So, we don’t impose our new “toys” on our physicians. We make it available but meet them where they are.

Our hope is that over time, we gradually move them along the spectrum with more technical options and tools. We have a one-page dashboard that hits all the important KPIs. We use engagement meetings to explain the reports to physicians. Again, we meet each doctor where they are, and then as the relationship builds, we move them more toward digital.

CEOCFO: What is the competitive landscape? Why engage with Genuine Health Group?

Mr. Caruncho: There are a lot of groups that are purportedly doing what we are doing. We think we are different in a couple of important ways. One is that we are kind of a hybrid of a traditional risk provider, and the front-facing aspects of a regional health plan. We accept risk directly, and we manage it. When large companies come in and buy regional health plans like my former company, they inevitably move a lot of the engagement activities that we used to do locally to their national “shared service” models. We saw that it was a real opportunity gap, so we recreated the physician engagement aspects of our prior health plan.

So, we combine a traditional “MSO,” or Management Services Organization, with the physician-facing competencies that we had as a regional state plan. We told the doctors, “You can have the stability of the national plans (because we contract with them). Therefore, you do not have to give up that hand-holding and personal engagement and the ability to meet in person that you miss from not having the Preferred Care Partners of the world around anymore. You can have the best of both worlds.”

The second factor: we were the first to do this in our market. Usually, these “MSOs” have focused on the Medicare Advantage for seniors that chose to get their Medicare benefits through an HMO insurance company. However, part of the value-based care trend is that Medicare has created all these value-based care programs, such as the ACO (Accountable Care Organizations) for seniors that have NOT chosen to enroll in an HMO. The newest one is called Direct Contracting Entities. We are one of only 53 that are approved in the country. We approach doctors and explain that they are going to have to move to value-based care, and that we are going to be their single point of contact and do all of it for all their senior patients. Some other people are not doing it, and we have been doing it since we started the company. I think it makes us unique.

One other thing that makes us unique is that, when you read about a lot of these competitors, their way of engaging the doctors is to buy them. They have to acquire them, which is expensive and a capital-intensive way to do it. Their belief is that you cannot engage and change a doctor’s behavior unless you own them and employ them. The fact is that the majority of physicians do not want to sell their practices. We think we are unique in that we know how to do that right. We know how to recruit, affiliate, and engage physicians – and change their behavior to help them succeed without having to acquire the practice. I tell doctors that if they want to stay independent, we are their lifeline. We will permit them to stay independent in this changing world of value-based care.

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“We think of ourselves as a single point of contact, a one-stop-shop for physicians to successfully make this transition to value-based care, which is the future of healthcare.” Joe Caruncho