Category: Videos

06 Jan 2021

Will AI replace GIs? President of Medtronic GI responds (interview)

Recently, Medtronic released a video showing how Pillcam (in partnership with Amazon) will enable home-based colonoscopy screening. Watch Giovanni Di Napoli, President of Medtronic GI sharing that vision.
Naturally, I was curious to find out more and interviewed Giovanni few days ago. In this interview, he walks us through how Pillcam and GI Genius will evolve in the coming years. GI Genius is already approved in Europe and helps endoscopists use AI in detecting polyps. Further, he reflects on whether he sees Cologuard as competition or not and if insurances would mandate payment on adenoma detection rate (ADR).
We also talked about how these developments will change the role of gastroenterologists. Do not miss this one (18+ mins) – get a glimpse into the near-future of GI.
◘  Giovanni’s journey: From a basketball coach to senior executive at a Fortune 500 med-tech company
◘  What is Medtronic up to in gastroenterology?
◘  “Alexa is going to remind you: ‘you’re 45, Happy Birthday, but you should also go for a CRC screening'”
◘  Giovanni on the role of physicians: “AI is going to support the decisions but it won’t be taking the decisions”
◘  “Cologuard is going to detect cancer but PillCam will detect early cancer or pre-cancerous lesions”
◘  “For endoscopists, being able to visualize,  size and localize the lesion is critical”
◘  “I also see a future where patients can have an ask”
◘  Will we reach a point where the AI is going to handhold and guide the endoscopists?
◘  “If I’m a gastroenterologist, I will give more attention to beat the machine or be as fast as the machine to identify this lesion”
◘  “I don’t think AI will replace the need for a gastroenterologist. But there will be a performance matrix that you want to hit”
◘  Vision for GI: Do you see PillCam talking to GI Genius?

The Transcribed Interview:
Praveen Suthrum: Giovanni Di Napoli, president of Medtronic Gastrointestinal. Thank you so much for coming on board today. I look forward to our conversation, but first, I want to welcome you.
Giovanni Di Napoli: Thank you very much for having me. I’m looking forward to this conversation as well Praveen.
Praveen Suthrum: Great. Giovanni, you’ve recently been named the president of Medtronic Gastrointestinal, and congratulations on that. So, I wanted to first walk back on your career. I’ve learned that you were a basketball coach once upon a time. So, I wanted to understand how that journey has been? From that point of time to being a senior executive at a Fortune 500 medical devices company.
Giovanni Di Napoli: Yeah, thank you for the question. Actually, I’m very passionate about sports in general, but with a particular interest in basketball. That was my place to be since I was four years old. And I kept playing and playing until I was 15 or 16. And then I started to coach. At the same time, I was finishing my economics degree and the moment I finished my economics degree, I just wanted to check out and see what this would mean for me in terms of a business opportunity, just because I was curious. And I clicked on a link of J&J Medical Ethicon Endo-surgery. I applied for a job in Rome, and they called me. I went for the interview and I fell in love with the vision of the company and what they were doing. Also, my dad is a nurse and so I actually appreciate his work in helping patients throughout my young age. So I felt like, “you know what? I think I like this job and I want to try to give the shot”. I was not looking for a job at all. It just was a coincidence and also my father’s background that pushed me to apply for this. And I’m here now.
Praveen Suthrum: That’s awesome. And let’s talk about that some more. So what is Medtronic up to in gastroenterology?
Giovanni Di Napoli: So a little bit of history here. Covidien, which is the company that Medtronic acquired three years ago, bought a company called Barrx, I’m sure you know this radiofrequency technology to prevent esophageal cancer. And I was working for this company actually at that time. And so, I was acquired by Covidien from Barrx. And clearly, Covidien was going to invest a lot in GI as a space where procedures that could go earlier in the care continuum from surgery. And Barrx was the first acquisition. A couple of years after we acquired Given Imaging. So we acquired scale across the globe because at that time PillCam was already well-established technology in the US and also beyond the US.
With Barrx and the combination of this new technology, we were able to get out from just being one device company at that time with Barrx to become a little bit more present in endoscopy and GI markets. So the long story short is that we kept moving into BD, acquisitions… EndoFlip (Crospon) for example, one more. And now I mean, we are also in a position with this new portfolio that I’m sure today we will touch base upon the video…to be a really strong leader, not only in GI but in endoscopy in general because that’s the goal of the company.
Praveen Suthrum: Excellent. So, Giovanni, let’s talk about that video that you just referred to and that prompted this whole interview. It’s amazing. The vision for PillCam is quite amazing… you talked about a patient receiving or buying it online and receiving it at home maybe and swallowing it like a vitamin capsule. And by the end of the day, getting a notification on a mobile app about whether she has polyps or not. That’s an amazing vision for how screening for polyps can happen compared to what we do today. Can you talk about this a little bit more? And then I have follow-up questions.
Giovanni Di Napoli: So the idea was how can we disrupt this market? One of the things that I always remember when we acquired Given Imaging at the time of the Covidien was the future of PillCam COLON and how this technology could reach millions of patients that today don’t want to go through a colonoscopy and they are not compliant. So we started from there and we understood that the technology as it is today, is not ready for prime time, is not patient-friendly. And it doesn’t allow the GI to be able to really leverage this innovational technology to accelerate diagnoses and also potentially even diagnose more patients in the future. And one of these partnerships that we were able to establish with the teams in Seattle, where we spent a couple of weeks, two and a half years ago, we sat down together with them.
We painted a picture of the perfect world, which is what you saw in the video. I’m home, I’m 45. Alexa is going to remind you that you are 45, Happy Birthday but you should also go for a CRC screening because CRC is the most preventable cancer, but still, the least prevented. So and then we thought why not ship the device at home and just go through this technology like would take a normal capsule, a vitamin pill, and then through AI and through also additional innovation that we are bringing to market it connects this with a gastroenterologist and in case of any positive finding, have the opportunity in the same day to also perform a therapy. So we want to go from start to finish. And that’s the reason why we believe this technology can really impact our patients across the globe. I mean, it’s one more weapon that we have on top of the other screening tests.
So we are currently in development and we are willing to start a pivotal trial early in 2022 where I’m pretty sure we need to go through to get FDA approval. But I would say the work we have done in the last 18 months tells us and tells me also that we are on the right track to stick with the timeline and also with the promises we have with this technology.
Praveen Suthrum: So in this vision, what is the role of the physician?
Giovanni Di Napoli: Oh, it’s critical because AI is going to support decisions, but it won’t be making decisions. So AI is going to provide the most meaningful images and videos to the GI to make a sound decision about that patient eventually the GI is also going to decide whether the patient needs to come for a colonoscopy, a follow-up, or doesn’t need to come for a follow-up. We actually believe this technology is going to enable them to see more patients in the endoscopy suite and treat them earlier in this stage of cancer development.
Praveen Suthrum: So let me ask you a different kind of question here and bring up liquid biopsy and other alternative ways of detecting cancer, which are coming up. So from that standpoint, let’s assume that the vision for liquid biopsy, which is taking a blood test and screening for cancer, does come true. And as we know, the holy grail, there is not to detect just one, but 15 different types of cancers with one sample. So let’s say that does come true then of what your vision is for PillCam would it go along with that or would it compete? Any thoughts that you have there?
Giovanni Di Napoli: I think our position is going to be different than liquid biopsy. Liquid biopsy, as far as I know now can detect cancer or Cologuard can detect cancer. But you know, PillCam Genius is going to detect early cancer or precancerous lesion. So which is where actually the most impactful therapy can be made. So polyps and adenomas. So if liquid biopsy won’t be able to have a high level of sensitivity for these precancerous lesions, I think is going to be positioned in a very different way. Also, if you think about it PillCam Genius would be the only test that can visualize the lesion, could be the only test that can localize the lesion. It could be the only test that can size also the lesion. And I think for endoscopy, being able to see visualize, size, and localize the region is critical if you need to have a follow-up colonoscopy to remove that lesion, I think that our value proposition is going to be different than liquid biopsy.
We respect what they’re doing. I know there is a lot of investment there. I think is going to add that one more component in the armamentarium of tests available for those patients who need to get screened. And I think now with the age going from 50 to 45 eligible for screening, even more patients will need to get screened. So even in terms of capacity, I think we can also be one of the options. Plus, I believe our technology is going to be attractive on the technology side and I think is going to be very patient-friendly and that these also will be, in our opinion, a good plus to have into our technology.
Praveen Suthrum: Very good. Let’s talk about GI Genius now. It has been approved in Europe, and from what I understand, you are going through FDA approval in the US. Can you share a little bit more about GI Genius as a product and what stage is it in right now?
Giovanni Di Napoli: Yes, so we are very proud of GI Genius. We were the first to be in the market with artificial intelligence to have detection during colonoscopy. And the partnership with Cosmo Pharmaceutical in Italy is working really well. So the European approval came last year just before UGW, and we were very happy to be able to showcase our technology. And the technology is ticking off. We have many units already placed in different markets. Clearly, it is not as fast as we were expecting because COVID-19 had a very huge impact. As you know, the number of colonoscopies and patients going to the hospital from last February, especially in Europe, went really down. And this also impacted many opportunities that we were working with our team in Europe.
So I can tell that before the second wave, which happened just a month ago in Europe, things were getting much better. So we are patient, we are focusing on clinical outcomes and we are focusing on a center that actually can also support education. And I don’t know if you know, but also we have partnered with the ESGE, which is the European society in Europe, and we provide a very important grant for clinical investment on the AI during colonoscopy, I think is about 1.5 million dollars investment. And also we are going to provide the technology to generate this data, especially these days because going for a colonoscopy is very important, can prevent cancer. So we hope this will accelerate the recovery of the backlog.
Praveen Suthrum: So let’s talk a little bit about the gastroenterologist’s private practice standpoint. So they rely on reimbursement from insurance, now with the technology like AI in the endoscopy room coming, their ability or people using the technology, their ability to detect polyps goes up because the AI is going to help them do that. But there are several people out there who may not adapt soon enough and then maybe using old technology. So do you see at some point insurances mandating a certain base level of Adenoma Detection Rate so that endoscopists do not have a choice but to advance in the use of technology? Do these conversations come up in your discussions internally?
Giovanni Di Napoli: Yeah, I think you got the point. I mean, GI Genius and AI in general for colonoscopy is going to have gastroenterologists to be somehow more precise where it actually is not possible to be precise. You know, I always make this analogy. Do you want to be patient number one of 15 that day or you want to be the last one to be seen by the gastroenterologist? I’m sure, you know, fatigue plays an important role in detection. If you have AI technology helping you throughout the day, you can keep your level of performance the same. And I think this is also shown by multiple studies. And I think this has to be taken into account also for payors as well as from society.
I know there is a task force looking at the ADR, and if this is going to be possible to be over a certain percentage. I think with AI it is going to be possible. If the insurance is going to pay on top of what they are already paying, I don’t know yet. I think I also see a future where also patients can have ask. And not because I don’t trust the gastroenterologist because he or she will make the final decision. But again, performance is going to be critical. And you want to get the performance anywhere in the US in any place you go for a colonoscopy. And I think these technologies will help to get there.
Praveen Suthrum: If you examine how technology moves, let’s take the example of Google Maps as an app, or let’s take the example of Siri or Netflix. At the early stages of these technologies, I remember clearly when I used to drive before how much I used to the member streets and how less I remember now or my need to remember streets has steadily declined. So I’m wondering if all of this will get to the point where the endoscopist will be completely guided by the AI? You know, if we advance forward enough, will we reach a point where the AI is going to do pretty much handhold and guide the endoscopists on what he or she needs to do?
Giovanni Di Napoli: You know, I actually see this on the opposite side, If I’m a gastroenterologist supported by artificial intelligence, GI Genius in this case, during my procedure, I’m actually going to pay more attention to somehow beat the machine or be as fast as the machine to identify the lesion. And I was in a couple of cases in the UK last year when we launched the device, and I could tell that the feedback was, “Oh my God, I want to be faster. This is going to give so much training opportunity for our GI fellows because they will learn quicker.” So I think if you know how to utilize it, the technology is going to improve your performance and keep it stable.
I don’t think AI going to replace the need for a gastroenterologist and an endoscopist to perform colonoscopy. Not at all. But yes, for sure there would be performance metrics that you want to hit. And if the performance metric is to find a certain amount of polyps in 10 patients, you want to be at that standard. It’s almost like a benchmark. And so I think it’s going to give you more motivation to stay attentive, to stay focused during the procedure together with the machine. So that’s the way we see AI working, especially in colonoscopy.
Praveen Suthrum: Do you work with the insurance industry at all related to the financial aspects of the technology that you launch?
Giovanni Di Napoli: Yes, we do. And our leader is working very close to them to understand also needs and opportunities.
Praveen Suthrum: Giovanni, my final question, trying to connect all these dots is do you see PillCam talking to GI Genius internally? And if you have to fast forward five years or even beyond, what are we going to see? What is the vision for GI?
Giovanni Di Napoli: So we have technologies in our portfolio that can be genius powered, which means we’re going to offer more and more solutions to our customers with artificial intelligence. GI Genius is the first of this solution. You mentioned, are we going to be able to connect the dots with GI Genius and PillCam? I would say the answer is yes. There are multiple solutions. Think about EndoFlip for Motility disorders. Think about Manometry. Think about pH impedance and all of these technologies that can be Genius powered. And we have a huge investment in place with over 30 plus engineers in Israel. And also the partnership with Cosmo is really strategic and important. So we believe that we can go faster and we can bring disruptive innovation, genius powered into the Endo-suite.
Praveen Suthrum: And from the lens of an endoscopist or a gastroenterologist, how would that vision play out? What would they be doing differently five years from now?
Giovanni Di Napoli: I would say data is going to support the decisions. And I also would say that we’ve simplified the workload of our customers in order to be able to perform more procedures on the same day and see more patients and prevent more cancer.
Praveen Suthrum:  Giovanni, thank you so much for spending time today and sharing what Medtronic is up to in the space of GI. Was there anything else that you wanted to share before we close?
Giovanni Di Napoli: No, thank you very much. And I’m very happy to be in this business. I promise Medtronic is in GI to stay and also to invest. And you will see more and more coming from our company.
Praveen Suthrum:  Thank you so much. Giovanni.
Giovanni Di Napoli: Thank you.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
22 Dec 2020

Interview with Dr. Kosinski (SonarMD): “We are not practicing on an island. You can’t build a wall around colonoscopy”

Dr. Lawrence Kosinski is the Founder and Chief Medical Officer at SonarMD. In this exclusive interview, Dr. Kosinski said what needs to be said. It’s an urgent wake-up call to the GI industry. The topics we cover range from starting up a GI-tech venture to private equity, valuation concerns and what in the end has value in life.
If you have time for just one insight, let it be this one: risks of basing PE valuations on vulnerable assets. The right thing to do would be to make time to watch the entire interview. Each minute of this interview has insights that would save the industry enormous time and money.
Do not miss this one (25+ mins).
◘  Being in private practice vs. running a GI-tech startup
◘  “I’m still helping people. Except I’m not helping one person at a time, I’m helping a lot of people at one time”
◘  The story behind SonarMD
◘  “My first ‘aha’ moment for SonarMD was….”
◘  Why aren’t more GI doctors starting entrepreneurial ventures?
◘  Are GI practices “colonoscopy factories?
◘  “The market is screaming for solutions!”
◘   “No one would build a business and be a one trick pony and ride that pony till it turned into a nag”
◘   “Take a look at cancer registries…”
◘   “If our passion is to eliminate colon cancer, then let’s figure out more ways to do it”
◘  Dr. Kosinski reflects on private equity in gastroenterology
◘  “There may be seven platforms but they’re all not the same”
◘  “There are no second-bite of the apples yet in GI”
◘   Are we basing valuations on EBITDA multiples that hinge on vulnerable assets?
◘  “We’re not practicing on an island. You can’t build a wall around colonoscopy”
◘  What would a future-oriented GI practice look like?
◘  Dr. Kosinski’s advice for younger gastroenterologists

The Transcribed Interview:
Praveen Suthrum: Dr. Larry Kosinski, thank you so much for coming to this conversation and having this chat with me. I want to welcome you first.
Dr. Lawrence Kosinski: Thank you very much for asking me to be part of this interview. I look forward to it.
Praveen Suthrum: So, Dr. Kosinski I want to start by asking you how your life has been in a full-time or near full-time in a digital health startup as the Chief Medical Officer of SonarMD and how does that differ from being in private practice GI?
Dr. Lawrence Kosinski: Night and day! It’s a totally different experience. I love being a gastroenterologist. I spent my entire adult career as a practicing gastroenterologist. I loved the patient interaction I loved the interaction with all my colleagues. I felt so good that I was doing something meaningful for people and helping people in their everyday lives. But I always had this burning desire to do something more. I’ve always been a problem solver so it was an easy transition into this. But my transition from clinical practice to Chief Medical Officer of a startup company was a very easy one for me to take. That move was not difficult at all and I transitioned through it over the course of a few years. And last year when I finally ceased practicing, it was almost anticlimactic. I finished my last procedure which had 15 polyps! Supposed to be an easy procedure but the last procedure I did as a gastroenterologist had 15 polyps! And since then I’ve been extremely happy in my role. I’m still helping people except I’m not helping one person at a time; I’m helping a lot of people at the same time.
Praveen Suthrum: So, I want to ask you to go back a little bit in the history of SonarMD. Why did you start the company? What was the trigger?
Dr. Lawrence Kosinski: Well, I have been starting companies for 30 years, but this one specifically has a unique story. I was involved heavily at the AGA and have been involved since… Oh god! For 15 years now! And I had sat on the practice management and economics committee for three years and they asked me to chair the committee. So, I came on as chairman of the practice management and economics committee for the AGA back in the fall of 2011. And something that I had always struggled with in GI is the lack of diversity in revenue streams of gastroenterology. So much of it comes from CPT codes that surround colonoscopy and so when I took over the committee I said, you know, I want to do something more than just put in my three years. I’d like to accomplish something. And if I could help my colleagues diversify their revenue stream and build new lines of business, I would accomplish something. And since value-based care is something that’s in vogue, I said okay, “What are the most significant illnesses we take care of as gastroenterologists? It’s inflammatory bowel disease those are our sickest patients, our most expensive patients, the ones that wind up having the most morbidity. So, I went to Blue Cross Blue Shield, Illinois, and used every chip I possibly could to get in the door. Because all I wanted from them was – What does it cost to take care of Crohn’s disease? That was my question.
So, it took a few meetings of begging before they realized this guy’s crazy. He doesn’t want more money, he just wants data. So, they gave me an enormous data set – every claim on 21,000 patients with Crohn’s disease for two years. It was an enormous file! Excel crashed, I had to build a SQL database out of it which took some time. And we analyzed it and in the analysis, I got my first ‘aha’ moment for SonarMD. Because there was a 17% hospitalization rate in this patient population which is consistent. We’re seeing around 14% in our BHI database analysis today. So, 17% and the doctor may say, “Well geez! What could have been done to avoid those hospital admissions?” And so, I went into the 30-day period before each of these hospital admissions, created a query so we could see what CPT codes came out in those 30 days, and in over two-thirds of the patients there wasn’t a CPT code. That was my first ‘aha’ moment because I thought these are symptomatic patients that have relationships with their doctors and they go over the cliff without realizing it.
And then the light bulb went on in my head and I thought… it’s true! I’ve stood next to the bedside of patients for years in the emergency room and I would ask them, “Why didn’t you call me? And what the patients will tell you is…” ah doc I have this all the time” “oh I thought I had the flu” “oh I thought I ate something wrong” or they’ll tell you that “I’m busy with my kids or my job or my family” whatever. The bottom line is patients with Inflammatory Bowel Disease… we look upon them as Crohn’s patients or Ulcerative Colitis patients. They’re human beings who have lives and this illness is just one component of their life. So, I said I’m going to see if I can do something to help people present earlier in their deterioration. And I was home that night and I was watching the Hunt for Red October. And as Sean Connery says, “Send him one ping, captain” I said I need a Sonar system! I need a way to ping these people in between their face-to-face visits. So, a medical professional can decide when they need an intervention that was the beginning of SonarMD. After our first year success where we showed we could lower hospitalization costs by over 50% and lower emergency room costs by over 70% Blue Cross then said, can you put this in other practices? And that’s when I needed to form a company and that’s when I formed SonarMD so that was in 2016.
Praveen Suthrum: That’s an amazing journey. I’m curious whether Blue Cross paid you that first year? Or did they want you to show success before?
Dr. Lawrence Kosinski: No. I have to give Blue Cross Blue Shield, Illinois a lot of credit. They paid us they gave us upfront per member per month, we had to bill it, and they created a code. The Blue Venture Fund which is the investment fund of all of the Blue Cross plants… they pool their money together and they gave it to a company that at the time was called Sandbox industries in the Fulton Market district here in Chicago. And so, Sandbox came in… to Matter and did a Shark Tank. And so I said, “I can do this!” So, I was the oldest person there. The only one in a suit and tie and I pitched SonarMD. They liked it especially because I had revenue, I had a contract, I was a business, and I wasn’t just a concept, I was a business that was generating money and building and it was in their space. So, they agreed to invest. March 1st, 2018 when we closed on this thing, I think it was March 6th; I was the only employee of SonarMD. I had the investment money, I was the sole employee of this company, and we had to build it and now we have 20 employees and we’ve gone through Series A and you know we’re rolling.
Praveen Suthrum: Yeah. Congratulations on the success so far. It beats me why more GI doctors aren’t starting entrepreneurial ventures like you have?
Dr. Lawrence Kosinski: It is myopia and blindness, we get myopic. If you talk to gastroenterologists, and I love my colleagues and I was doing this myself, you get pigeonholed into colonoscopy. You’ve got your endocenters; you’ve got all your revenue streams coming out of the endocenters; you live and die over those cases. You have myopia. You have blinders. You can only see this… you can’t do this.
Praveen Suthrum: In your interview in the book Scope Forward, you had referred to GI practices as “colonoscopy factories” and some thought it was harsh, but for some… you know, it woke them up. And I know for a fact that it changed people’s mindset… that single interview. So, I want to ask you, what you were referring to when you said that? And I want to tie it also to your recent article where you call for a dramatic change in gastroenterology?
Dr. Lawrence Kosinski: Well, it referred to the same myopia I just spoke about. It’s wonderful to be able to go to your endocenter that you own, work with employees that you employ, and basically do the same thing over and over and over again and you get really good at it, and everybody tells you how good you are at it and it brings you a wonderful income. So, then there’s this crazy guy, Larry Kosinski, telling you that you know, you should be doing something else. Well, it’s like buying a stock. The day you buy a stock… that decision can be made but when do you sell it? Or it’s like with retirement. When do you retire? When do you bring in a new product line? Do you wait till the product you currently have has fallen apart? Or do you take the profits that you have from your successful product and reinvest them to expand so that by the time your current product starts declining you already have one to take over or two or three but you’ve diversified yourself.
So, the reason I said that, is because we have created factories! We make widgets! We do the same thing over and over and over and over again. My point is I think we should invest some of the money that we’re profiting from on making these widgets to do something else that the market needs. And the market is screaming for solutions, patients are screaming for solutions. And why don’t we give them to them why don’t we use this intelligence we have and why don’t we create them? And so you know the entrepreneurial side of me is always looking for something else. It’s just this itch. But from a business point of view, no one would build a business, be a one-trick pony and ride that pony till it turned into a nag. We have to invest so we can diversify.
Praveen Suthrum: But wouldn’t your colleagues argue saying that it is the gold standard and there are so many people out there who still aren’t screen and you know there’s only more need for GI care so you know why shouldn’t we be serving all of these millions of people who need GI care, stomach cancer or GI-related cancers are on the rise so shouldn’t we be doing, in fact, more colonoscopy? And you’re suggesting to do less, why?
Dr. Lawrence Kosinski: I’m not suggesting to do less. That’s not what I was saying what I was saying was diversifying and build. But take a look at cancer registries I’ve done this. I looked at the cancer registry data in Illinois from 2006 and compared it to the cancer registry data from 2016. Now what this cancer registry data tells you is what stage patients are presenting with colon cancer. It hasn’t changed despite the thousands and thousands of colonoscopies done in Illinois in the 10 years between 2006 and 2016. The Illinois cancer registry data is unchanged. So, yes it would be great if every human being came in for a colonoscopy, that would be great but human nature is not that. Human nature is telling us that at least a third if not more of our patient population doesn’t want to have anything to do with a colonoscopy and has their head in the sand and those people are getting colon cancer. And like my Crohn’s patients in SonarMD, they’re not presenting early.
So, what we can do if we really did care about our patient population we would be looking at what other mechanisms we can use to screen patients. And the big fear everybody has… “Oh well if we have them do FIT or something like that then they’re not going to have colonoscopies and we’re not going to make money and it’s going to be bad for our business.” I would contend you’re actually going to build your business because and I’ve run spreadsheets that show that if you could get that 32 to 35% of the population that isn’t being screened to come in for a screening of any kind you will capture the patients in there that have the positive screening tests and they’re not only going to be screening colonoscopies they’re going to be surveillance colonoscopies that you’re going to be able to survey over the years. So, let’s not be pennywise in dollar-foolish here, and let’s do things for the right reason. If our passion is that we want to eliminate colon cancer then let’s figure out more ways to do it. You know that’s the way I look at it.
Praveen Suthrum:  Excellent! I want to switch gears and move to private equity. Now you successfully transitioned your practice to a PE platform and then you retired from private practice, you moved on, and during the course of our interview, this was last year in 2019, I asked you – What are your concerns about private equity? And you said, “LOTS!” and that ‘lots’ was in caps in the book. And you started with culture.  So, now fast forward to almost the end of 2020, we have seven GI platforms and maybe one more I hear before the end of the year. So, how have these concerns played out?
Dr. Lawrence Kosinski: Well, you have this little thing called COVID-19 that was overlaid on top of it, and probably the worst thing any of these platforms could have feared to happen to them was to initiate and then get slapped with a pandemic that cut the revenue stream out of that one procedure they do and 80% of their revenue depends on and it’s an elective procedure that people don’t necessarily have to come in and get. So, this has been challenging for the private-equity-owned practices and most of my colleagues have done their best, they’ve really worked diligently to try to maintain their staffs, the viability of their endocenters, to continue to get a return on their assets, and the investors are equally probably suffering as well. We’ll see…we’ll see how they come out. I think that’s yet to be determined. Now, there may be seven platforms but they’re not all the same.
And I like some of the newer models that are being deployed. My big problem with private equity… and I was part of the process that caused IGG to sell to the GI alliance and you know we went through this laborious process where we interviewed 20 different companies. We had multiple rounds of interviews, and we chose the GI alliance and I would do the same thing again with the way the process went through I’m not second-guessing what we did. But as a senior guy in the leadership of IGG who stayed on an extra year of practice just to help them do this, I was going to retire from practice in 2018, I put off my retirement to 2019 so that I can help the group make the final decision and go through all the legal ramifications it took. And just for the record, I retired ahead of the closure. I received no funds from that purchase. I retired with zero from that. I had altruistic reasons for why I helped my partners with the process but I was not doing it for any personal gain because I knew I was destined to run SonarMD.
So, anyway, my biggest challenge in the current private equity structure is that this is an LBO buying perpetuity. They’re using other people’s money largely to purchase the assets of the practices in hopes that they can build that business and then get out in several years. The practice, on the other hand, you could be a 40-year-old doctor; you are giving up a percentage of your income forever. That’s been my struggle is that you’ve got a short-term investor using somebody else’s money, buying perpetuity of your income forever and the only way it turns out as a positive for the doctors is if it allows them to continue to practice as doctor putting the patient number one in their focus and that’s a challenge. And secondly, they continue to get payouts from the transfer of this ownership to other entities, over the years. It’s not been done before in GI. There are no second bites of the apples yet in GI. We don’t know how that’s going to turn out. That’s the thing I struggle with – Can you maintain that culture? Can you maintain the fact that you are still a doctor and that your major focus is helping patients and generating an income in the process but you’re a doctor taking care of patients? Can that be preserved? Or is all the other noise involved in the financial aspects of this investment going to interfere with your ability to do that? That’s what I was referring to when I said culture. That’s the culture I hope we don’t lose.
Praveen Suthrum:  Yeah. So, there’s a PE question that I’ve always wondered and I’ve asked this to a bunch of people and I want to ask you the same. Now all the valuations have been based on adjusted EBITDA and the adjusted EBITDA is based off of physician productivity or rather future physician productivity, normalized compensation of physicians, and so on. Now that future productivity and I’m connecting the dots to your earlier point today which is that productivity currently is tied largely to certain procedures and going back to that point on procedures…that procedure itself or the revenues from that is a vulnerability rather than an asset. So, if I have to connect those two dots, we’re actually basing a valuation on a vulnerable asset and I’m probably making broad assumptions and connecting the dots here but you know this question I do have. So, you know, what happens when those EBITDA assumptions don’t come true? Am I thinking correctly?
Dr. Lawrence Kosinski: You are. You are thinking exactly the way I’m thinking because it would be better I mean if I was an investor I’d look at that and say, “Oh it’s a single revenue stream, and oh that colonoscopy reference revenue streams driving the pathology revenue stream, it’s driving the ASC revenue stream, it’s driving the anesthesia revenue stream.” So, if something happens to that colonoscopy procedure the other revenue streams fall off too and it’s vulnerable, it’s a significant vulnerability plus it’s an elective procedure it’s not like people are clamoring to get in. We have to send them their reminders and you know I’ve looked at the data across the country and a lot of the practices and I don’t know that some of the best practices are getting 50% of their patients to actually come back for the repeat colonoscopies.
So, it is vulnerable and I’m concerned about what’s going to happen a few years down the line here. We saw a five percent cut in colonoscopy professional revenue this year with the new Medicare fee schedule. It has cut five percent! So, you know I don’t think we’re going to see that stop. I think that’s going to continue over time. And it’s clear that the Robin Hood concept that’s happening inside CMS taking from the rich and giving it to the poor… they’re taking money out of procedural services and moving it into cognitive services and I don’t see that stopping. I also don’t see the payors stopping to find less expensive ways so that they can maintain their star ratings for screenings without overpaying for certain procedures. We’re not practicing on an island. You can’t build a wall around colonoscopy. Colonoscopy has to be able to handle the competition that’s coming from Exact Sciences, other technologies, we now have the liquid biopsy, and we have all this technology that’s being developed to identify who is at risk for colon cancer. And so that goes back to my initial thought – you’ve got to have a diversified revenue stream
Praveen Suthrum: Yeah. If you were to get a bunch of practices together or a bunch of doctors together and start over and build a future-oriented GI practice what would that look like?
Dr. Lawrence Kosinski: I’ve given this a lot of thought. I do believe that we are at a point in time where we can virtually integrate GI practices based upon acceptance of risk and provision of value. If we’re given the data from the payors, if we have that data, we can change…that’s mandatory. We can’t do it without the data. I have learned so much over the course of the last five or six years about where the costs of care lie. I have access to claims data all the time and claims data that my colleagues do not have access to and I can tell where the drivers are for the cost of care and look at the levers that can be moved. So, well-run gastroenterology practices that are factories, that’s a good thing, okay? They’ve got the process down. I think there’s value-based care revenue streams that are there for the taking if we construct it the appropriate way. Just think about this in a medical practice, not just a GI practice but any practice patients call with symptoms, with needs, and you have a human being taking care of that. Means answering the phone if they can’t deal with it, it gets sent to a billing person, if that can’t be done it gets sent to a clinical person, if it’s really serious it gets to a nurse, and if it’s really bad it gets to the doctor. It’s repetitive, there are hundreds of calls coming in every day in a practice… those are automatable processes. Those are places where you build an automation platform and you allow AI to refine it and make it better.
Praveen Suthrum: Yeah. I want to conclude our conversation with the final question, Dr. Kosinski. A couple of weeks ago I was in a conversation with somebody and then you came into the conversation and I think the context was being successful in gastroenterology and you know doing investments or building technology and so on. And this individual said you are one of the most successful gastroenterologists in the world and he meant every bit of it. And it was amazing. So, my question is you know let’s roll back the clock a little bit at the same time bring it to the present. If you were starting over today as a young gastroenterologist seeing everything that’s happening, and seeing the risks, seeing the opportunities, what would you do? And I would translate also that to what advice would you give the younger GI community that is coming out to practice in this field?
Dr. Lawrence Kosinski: Well that’s a complicated question, multiple moving parts to that. Given where I was in the development of technology for the course of my career I don’t know if I could have done it much differently. I embraced technology at every stage it was presented to me. I think, first… embrace technology. Number two, follow your passions. Don’t give up your passions but the only way this works is if you master what you are doing. So, you better learn to do that colonoscopy, learn to do it really well. Maybe you don’t need to do an ERCP, maybe you don’t need to be the guy that’s doing barracks master something and master maybe more than one thing but master it so that you can now say, “I know that… I’m going to go follow my passion for this.”
Build yourself time to be able to follow your passions and stay ahead of the rapidly advancing core of knowledge that becomes so challenging for all of us. Keep your personal life in order, okay? Don’t get divorced. I mean, keep your personal life in order. Keep everything in line so that you have the time, the intellectual space, and the energy to pursue things. You know, a career is a long thing. I’m 68 years old I’ll be 69 in February and every stage of my career has given me something that the previous stage didn’t give me and I lose something in each one. So, be willing to change, adapt to change, embrace technology, follow your passions. I’m not the wealthiest gastroenterologist. So, whoever gave you this praise of me…. The one thing I can tell you… I’m doing exactly what I want to do at this stage of my life and that has value.
Praveen Suthrum: Awesome. Dr. Kosinski, thank you so much for sharing your wisdom. I’ve really benefited, I’m sure people listening or watching would tremendously benefit from this. Were there any final words or anything that you wanted to say?
Dr. Lawrence Kosinski: Stay well. We’re almost there. This is like a marathon. We’ve hit the wall at mile 21 we just got to get to the end!
Praveen Suthrum:  Thank you so much.
Dr. Lawrence Kosinski:  Thank you.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
11 Dec 2020

Interview with Dr. Nandi (Pinnacle GI): “We are clearly in the third inning of private equity investments in GI” (not eighth)

On November 30th, 2020, Troy Gastroenterology (Michigan) announced its partnership with H.I.G. Growth Partners to launch the seventh private equity platform in GI: Pinnacle GI Partners.  
Dr. Partha Nandi is the President, Practice CEO and Executive Chair of the Board of the new platform. In this insightful interview, he shares why it’s still an early inning for private equity in gastroenterology, how they chose their PE partner and discusses challenges with EBITDA expectations.
My company NextServices recently partnered with Gastrologix and other partners to help launch GastroInfuse, an infusion ancillary.
Watch this exclusive deep dive into GI’s latest PE platform. Do not miss this one (20+ mins)
◘  How did you decide that you do want to do PE and eventually partner with H.I.G.?
◘  “Our two key goals: a) Continue to give the care that we’re giving b) Replicate the environment for our providers”
◘  “I’m not going to be naive and say this isn’t a financial transaction”
◘  Troy GI’s journey on selecting H.I.G Growth Partners
◘  Why didn’t they join an existing PE platform?
“Delivery of excellence in healthcare is regional and local”
◘  Their agenda for the first 90-days and beyond
◘  “It’s not about adding two tea spoons of groups, add water, mix and voila!”
◘  “The one thing that anybody listening should be aware of…” 
◘  Dr. Nandi reflects on the conflict between clinical goals and business goals
◘  Not all private equity (firms) are made equal
◘  “I want my junior partner to be able to say in 20 years that this was a great decision”
◘  What happens if physician productivity does not match EBITDA expectations?
◘  “Having myopic vision is not a recipe for success”
◘  “We are clearly in the third inning of private equity investments in GI” (not eighth)

The Transcribed Interview:
Praveen Suthrum: So, Dr. Nandi, thank you so much for joining me today on this conversation. Before we get started I want to congratulate you on being the seventh private equity platform in gastroenterology, you just made the announcement. So, congratulations to you and your team.
Dr. Partha Nandi: Well, thank you so much Praveen for having me. We’re excited and it’s my honor to be able to represent our organization and thank you for giving us the opportunity to talk about a little bit.
Praveen Suthrum: Excellent. So, I want to first start by asking you, how did you arrive at this decision? First to decide that you want to do PE and after that arriving at this decision with H.I.G.
Dr. Partha Nandi: You know when as a gastroenterologist and as an independent gastroenterologist our practice began in 1992 Praveen. So, we’ve been, you know, working and doing well. We started off as a group of two back in 1992 and we’ve now grown to over 19 providers in our practice and with multiple locations. So, for us, the decision was how are we going to be able to give the kind of care that we’re giving and being able to extend that and to other groups? And then second is providing the environment that we have for our providers and how do we replicate that, right? So, those are our two goals. And we felt like organically within our group we’ve grown sufficiently but the next step would require professionalization. Meaning that if we want to get other groups to be involved and really have some of our strengths and strengths of other groups come into the vote. We need to professionalize our organization and we thought how are we going to do that? Now we can do the traditional merging of groups in gastroenterology you know all of us are pretty independent so we said, “Well maybe that may not work.” It could, but it may not work. The second option would be, should we partner with a hospital partner? We have great relationships with our hospitals. So, should we then partner with the hospital? One of the other options, the third option that we picked was private equity.
So, this management services organization concept was attractive because you’re part of an organization and this organization is your common thread with all these other groups that we will be partnering with and yet you’re still maintaining independent practice. That was critically important for us. The most exciting conversations we had about this are – can we develop an IBD center of excellence? Can we finally effectively do obesity management? Can we revolutionize how our endoscopy centers deliver care? Listen I’m not going to be naive and say this is not also a financial transaction. Of course, it is because we could do other things as well. But this to be to me was the best way and our partners at the center for digestive health, we felt this is the right way. So, we began I would say 18 to 20 months ago Praveen, and we started with about 150 private equity firms, and with my partners at KPMG I personally met with 67 of those firms. And then over a course of several meetings in New York, Chicago, Dallas, and Detroit we narrowed it down to a dozen and then to five. And then we did an LOI in the middle of the pandemic in the summertime. So, with that’s how we picked our partners at H.I.G. They’ve been extremely successful in what they do you know their return is tremendous right so that’s a baseline financial but what’s also important is in all the management meetings you know, for me I always said… we have a very simple litmus test for our practice you know if we do something… my mom or any of my partners’ mothers’ or parents should be able to come and get it done, right? So, it may sound very basic but it’s very fundamental. The whole idea that quality standards and being able to do the right thing is important… resonated with H.I.G. tremendously. And they’re extremely conservative and they want to be able to do things right. It was extremely important and they wanted us to be able to practice in the way we have been and to accentuate what we’ve been doing.
Praveen Suthrum: Okay. So, I’ll ask something that I’m sure many in the audience you know would want to know. Why didn’t you join an existing PE platform because largely if you talk to them they would say that these are their goals too: to take care of the patient, keep up with quality, and also financially benefit… so and there were plenty of options. So, why didn’t you go that route?
Dr. Partha Nandi: That’s an excellent question. So, I met with all the platforms early on. Gastro Health, GI Alliance, US Digestive, I think I met every single one that existed at the time. And here’s the fundamental reason why healthcare and the delivery of excellence in healthcare is regional and local. That’s what we want. We want to be able to have folks that understand what the geography means. Michigan is a different environment in California, which is a different environment than Florida, which is a different environment than Texas, which is clearly a different environment than Pennsylvania. There are some national payors and there are some national environments that are common but the regional density and regional focus is critical in this. My goal is to be able to do this you know talk to my colleagues in Michigan and in the Midwest to be able to really do something that we want to. For example, we would like to contract directly with employers. How do you do that? You can’t do that if you have a center in Oregon, a center in Illinois, a center in Massachusetts, and then you say well you know we’d like this practice in Michigan with 19 providers to really be able to give you the employer who has 52,000 employees in Michigan, we’d like to be able to deliver care for you… that doesn’t work. can you please share some growth numbers that you experienced leading up to the transaction itself in 2019?
I can show you that my ASC with the triple AHC survey had zero citations that we were commended for an award from the AAAC. I can say that from a physician’s perspective, right? And then we have partners who can then show the spreadsheets and the financial analysis that show that this can be something that can work and be financially successful for them. So, that… plus payors. You know, there are some dominant payors in Michigan. Could we contract with them? With the national company, with a couple of practices in Michigan? Maybe. But I think it’s much more likely if we have the entire market in Michigan, the majority of physicians that are in gastroenterology and we come with common concerns and a common theme of efficiency I think we’ll be more successful.
Praveen Suthrum: It’s been about a week or so since your announcement. So, what is your agenda for the first 90 days?
Dr. Partha Nandi: As you know as many of the folks even listening may know the first literally first six months two years is one of transition, right? You’re trying to get everything organized and it’s a completely different organization. So, there are two answers… one is organizationally from Pinnacle GI, the management services organization and I serve on the board, so I have a different role for the MSO than from the practice. So, the practice continues on, right? From the patient perspective, there really is no difference. We continue to provide the best care we’re not changing that. We’re not going to dramatically change what we do, because we’ve done it well. However on the MSO side here’s what we’re doing is getting ready to make sure that the organization can run smoothly. Number one…what do we do from all the… so it’s overlooked but all the nitty-gritty… where do the accounts go to, who are the non-clinical entities versus clinical entities, and what are we going to do with our partnerships. We’re blessed that we have a partnership coming on by the end of this year we have another group of physicians that are going to be our partners coming up.
So, we’re planning on how we’re going to integrate with that group so that we can have our common strengths be accentuated, right? So, they can help us, we can help them, immediately. The key to this is it’s not about just you know add two teaspoons of groups, add water, mix, and voila! The critical part of the success of a gastrointestinal platform is integration and how you integrate effectively and that involves planning that involves finding out: What you’re going to do for revenue cycle management? What are you going to do for financial management? Who are your GPOs going to be for your traditional payors? Who’s your CFO going to be? How are you going to be able to manage a completely different organization that’s almost separate from the practice entity in our state? So, we’re doing all that. We’re developing targets for growth… meaningful targets, right?
The one thing that can happen and this is one of the things that that anybody who’s listening knows…hopefully or if they don’t know they should be aware of that you can grow but you can grow in a way that’s not meaningful, right? You can just keep adding people on without any real plan for integration that will fail because all you’re doing is adding layers of bureaucracy and overhead without really having to understand what you can do. So, you know, we have a pipeline of folks that we’re talking to for physician groups that are going to be our partners and finding out what ancillary lines do they have? What can they help us with? Is there a group that does infusion better than the platform group (which is us)? And how can we integrate with them? And what’s the plan for that? And in 2021 first quarter what’s our plan for doing that, right? So, we’ve got to get those things settled. You know if there’s a pathology lab that these folks use, do they use it do they not use it? You know, we were very interested in obesity management. Is there a strategy for obesity management? How can we plan that out? And looking at it from an organizational structure to see how much we need to grow but also from a financial perspective to see what kind of capital expenditures, those CapEx costs are going to be you know important to plan… and in this transaction, I didn’t go through with it but you’ve done that before is that you know part of this is… you have lenders that are involved in this and you have to have the lenders understand that what is going to be the trajectory of your group? What are going to be your financial needs? Those are critical to understand now so that when we get there we have dry powder to be able to accomplish those. But it’s exciting to be able to form an organization that is really going to be able to serve the under-served market in Michigan. I think that’s going to be exciting.
Praveen Suthrum: Got it. So, you know one of the aspects of private equity not just in gastroenterology but all of medicine or the concern is the conflict between clinical aspirations and business aspirations. And even in the book Scope Forward some of the interviews that I’ve done, when I ask people what are your concerns? They bring this up and they talk a lot about keeping the clinical side separate, clinical goals separate from the business goals, and so on. But as we know sometimes this can come in conflict. I’m wondering as you’re getting started with your PE partner, what you’re doing to lay this in place?
Dr. Partha Nandi:  That’s a great question and I think that the traditional view that people are petrified for and I think and they should is that there is an inherent conflict between financial goals and clinical goals, right? This is why I spent almost 20 months finding the right private equity partner. Not all private equity is made equally. You have to understand that and you have to let folks know what your goals are. To us clinical excellence, clinical quality supersedes everything. There’s nothing nice about the COVID-19 pandemic, let me assure you… but what was great to find is you had a situation that tested that philosophy, right? Did you have a private equity firm that tried to force things? To continue to go ramp up? Or do things that are unsafe during the pandemic? You heard I’m sure you’ve heard of instances where physicians were asked to practice unsafely because private equity firms were leveraged and they really didn’t do the right thing. Well, what was nice about us is in the top five of all of our choices for private equity, every single one of those firms shut down all their clinical activity during COVID. But again remember what I said before… we have a pretty simple criterion if it’s good enough for my mom, and it’s good for the practice with all of our practitioners, and it’s good for the bottom line, we do it. But if all those three criteria are not met we just don’t do it. But if something is bad for clinical success, but it makes more money, we won’t do it, we won’t, we haven’t and we will not in the future.
In the first quarter of 2020 one of our junior partners, we’re going to have him on the partnership track to be able to be part of this MSO. I want him in 20 years to be able to say, “Wow that was a great decision that really changed our trajectory,” right? So, in your question though, you said, what about some of the expectations? So, here’s why I think the 90-day plan is extremely important as you know you’re…in all of the work that you do, you’re very thoughtful in letting folks know economically how to be realistic in their expectations. You want to be bullish I mean you want to be like… you want to go for it and not say that you’re going to be stymied up but you have to be realistic. You don’t want to make growth such an important part that you forget about what it is that you’re supposed to do we’re physicians, we’re healers and caregivers, right? I’m still excited about taking care of patients and being able to help them. So, our goals for growth are great. We have tremendous goals but when you have a practice that becomes a partner, we want them to continue to do what they feel is best for their practice because we’re choosing these partners carefully.
The criterion is not that, “Do you have a pulse, then come on in.” We’re going to be choosy. First of all, we’re going to pick our partners to be practicing good quality medicine, and then we’re going to say you know we’re not here to impose upon you manners in which you should practice, right? Michigan is a practice medicine state the practice is separate from the MSO their relationships of course. However, nobody’s going to tell us how to practice. Here’s the different stuff if somebody you know knows that they can have a better revenue cycle management so that they can actually collect a few percentages higher than they do and spend a few percent less why wouldn’t they do it, right? Why wouldn’t they do it? If they can they can buy an infusion drug for a few percentages less because the fact that they belong to a GPO that you know that a buyer group that can actually help them why wouldn’t they do that right if they have a financial management system that shows them that this is where you have duplicity and this is where we feel you can actually grow. If you feel like there’s an ancillary line, let’s say you don’t do infusion and you don’t have to metaphorically stub your toe and learn by mistakes that people who’ve already done it and done it successfully can show you as part of this MSO.
Praveen Suthrum: The question around valuation in general which is as I understand, it’s a measure of adjusted EBITDA and when you adjust EBITDA, one of the important factors is physician productivity or physician future productivity. Now just going based on historicals, one big driver for physician productivity is screening colonoscopies and procedures because that is very much tied in and given some of the technologies which are coming and are already here let’s say the trajectory of GI takes a ship and somehow those productivity assumptions are not met so what happens in terms of your relationship with the PE partner if those EBITDA assumptions don’t come true?
Dr. Partha Nandi: Here’s the truth of this, right? So, private equity does not go in with just blinders on saying that, “We’re not going to look and we’re going to just you know be blind everything” that’s going on. They’re making an investment, an investment that’s not without risk, right? So, I mean this is part of the reason why we need partners that are adept financially and are experienced. So, there is no crystal ball saying that you’re absolutely going to be successful is there a chance of failure. Of course in any of these transactions, that’s present in any kind of private equity or other financial transactions there are risks, right? Of industry disruptions that are not only here but can come in the future. That’s in every field that you have.
I mean today Amazon is a dominant market player in consumer products, right? But it’s not to say that there could not be a player that’s coming in three years that’s going to take them off trajectory. So, what I’m suggesting is that are there going to be challenges in gastroenterology, in dermatology, in anesthesiology in every specialty that private equity is investing in, absolutely. Here’s where the challenges can be overcome… as you suggested in many of your writings that you have to be prepared for it, right? It doesn’t mean that you stop investing in endoscopy centers or ASCs you want to be able to invest in all kinds of patient care modalities that really help the patient, right? And of course, endoscopy is a big part of it. But you also want to be able to diversify it so that if liquid biopsies are a huge part of what’s happening in healthcare in five years, if it’s dominant, you have to understand how to incorporate that into your practice. You have to also be able to be flexible enough to say that… Could we add radiology services to our practice? Could we add obesity management to our practice? Could we add revenue lines and ancillary lines that help patients that we’re not doing now, right? Some of this can be an IBD center of excellence managing the entire experience for the patients.
We understand and we feel that the future is bright for patients and how can we be part of that future? Being part of the future is by listening to visionaries like yourself who talk about this every week, every day. About looking at the future and paying attention, listening, and then adjusting your organization accordingly. So, you’ll be able to handle those challenges and thrive not just survive in the future. That’s not a pipe dream it can actually happen you can pivot. If we remember one thing all of those so-called challenges are incredible opportunities for patients and as a consequence, there are opportunities for us, if we have the vision and also the ability to look beyond what’s right in front of us, right?
Having a myopic vision is not a recipe for success in anything especially in these kinds of endeavors. There’s a famous hockey player… Wayne Gretzky. Wayne Gretzky’s always asked, “Wayne, how come you’re so good and you’re always being able to score goals?” He said, “I’m not better than anybody else I just happen to know where the puck is going to be before it gets there and so, I’m there before the puck gets there.” I would offer to you that’s what Pinnacle GI is going to do. We’re going to be able to try to understand where the puck is going to be, where the technology is going to be, where the care is going so we’re there. And so, we’re not only meeting the challenges, we’re exceeding them and our expectations are not actually dampened but they’re exceeding.
Praveen Suthrum: On that note Partha, I want to thank you for sharing your thoughts it was fantastic. So, I wish you all the best and your partners at Pinnacle GI as well as you lay the foundation for this future. Was there anything that you wish to share before we close?
Dr. Partha Nandi: Absolutely, you know, thank you for the opportunity. The one thing I wanted to say was that… some people fear that the seventh platform, are we plateauing? Are there enough opportunities? Here’s what I would offer… in dermatology, there are 17 DMGs or dermatology management groups. And even with those 17 Praveen, it’s still a fragmented dermatology market. We’re incredibly fragmented in gastroenterology and I think there are many ways to be able to do this both regionally and nationally. And I think what this allows us to do is maintain independent gastroenterology practices in the United States, giving this excellent care that we know we can. So, to me, we’re just beginning. Using a baseball analogy, we’re probably in about the third inning of gastrointestinal PE-based investments. We’re not in the eighth inning we’re clearly in the third inning. So, I think that the future is bright and folks who are looking at this and listening to this you know if you think that your practice can really benefit from it I encourage you to look at Pinnacle GI and others to see if it’s a good fit for you.
Praveen Suthrum:  Thank you so much.
Dr. Partha Nandi: Thank you.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
20 Nov 2020

Interview with Gastrologix GPO: “We create companies that physicians can have ownership in”

What if you could own companies you spend money on? What if you could save money on routine purchases by getting bulk rates? With those ideas, Christopher Metz and Stephen Somers founded Gastrologix, a Group Purchasing Organization (GPO). Gastrologix is the first GI-specific GPO that works with independent gastroenterologists. Today, they count 75 GI practices in their growing network.
In this interview, Chris and Steve tell us what exactly a GPO is and how Gastrologix spun out of the Digestive Health Network (DHN). According to Steve, they follow a “soup to nuts” approach that relieves independent practices from doing things on their own. Chris tells us about three specific support areas that Gastrologix provides to the physicians.
My company NextServices recently partnered with Gastrologix and other partners to help launch GastroInfuse, an infusion ancillary.
Watch this interview to understand on-the-ground insights from a GI-specific GPO.
◘  The story behind Gastrologix
◘  What a GPO (Group Purchasing Organization) is exactly?
◘  “The interesting thing about a GPO is that it is a vendor-funded model”
◘  “We’re at about 75 independent practices right now and growing”
◘  GastroInfuse – For practices who want to start infusion as an ancillary service
◘  “We offer a ‘soup to nuts’ type of approach that relieves the practice from developing the initiative on its own”
◘  “The lion’s share of the profit goes to the practice as opposed to the services management company”
◘  “The role of Gastrologix is procurement of the therapy”
◘  Three-legged stool
◘  “We go beyond being just a GPO. We act as a business development organization on the behalf of practices”
“We create companies that physicians can have ownership in”
◘  “We helped a practice save around $200,000 to $300,000 for the development of their endoscopy center”
◘  What does the future look like?



The Transcribed Interview:
Praveen Suthrum: Chris Metz and Steve Somers from Gastrologix, I want to welcome you to our conversation. Thank you so much for joining me today.
Steve Somers: Nice to be here.
Chris Metz: Thank you, Praveen.
Praveen Suthrum: Yeah and you know, while we get started Chris and Steve can you tell us a little bit more about Gastrologix?
Chris Metz: Sure. Well Praveen, thanks for giving us an opportunity to talk about the Group Purchasing Organization world and how Gastrologix as a specialty GPO working with independent GI groups fits into that. So, Steve and I started Gastrologix a little over four years ago and we did that in conjunction with a couple of national GI organizations one being the DHPA – the Digestive Health Physicians Association as well as one that came along a few years later which is the DHN – the Digestive Health Network. And just a quick word on the difference between those two – the DHPA is a not-for-profit advocacy group made up of at this point, about 90 independent GI practices around the country and they started about seven years ago. A very successful organization… it does great work for independent GI groups and GI in general across the country and then around probably 2016 or so they decided to try to build on that success but in a more commercial way in creating the DHN – the Digestive Health Network. And that’s how Steve and I in conjunction with the DHN primarily created Gastrologix to support the growth of the DHN which is a more commercial or for-profit organization in that regard.
Praveen Suthrum: That is helpful. I just want to go a step further and understand what a GPO is exactly?
Steve Somers:  Yeah. So, a Group Purchasing Organization is really at its core a cooperative effort on the part of its membership. So, really what we’re trying to do is align as much combined spend in one particular channel as possible amongst the independent gastro groups that do join the GPO so that we can afford access to preferred pricing and possibly improve terms when any one of these entities is going to be purchasing goods or services from a manufacturer or service provider. And really the GPO…its success is driven by its memberships’ compliance with the effort so the more people that are involved, the more people that utilize the platform, the more successful the group is going to be. The other thing that’s interesting about a Group Purchasing Organization is… it’s a vendor-funded model. So, the fees and the revenues that are generated to support the GPO are actually paid by the industry partners as opposed to by the membership. So, the industry is actually paying for access to the membership and that’s really how it works from a fundamental standpoint.
Praveen Suthrum: At this point of time how many members do you have and what kind of companies are you working with on the industry side?
Chris Metz: So, we’re probably around give or take 75 independent practices and growing. And we work with industry partners that cover literally the gamut of everything that a GI does whether it’s in their office or in any of their ancillaries. So, pharmaceutical companies – J&J, Merck, Pfizer, all the way through device companies – Microtech, distributors – Henry Shine just about anything that touches on an independent GI practice we develop contracts to provide benefits to the members of the GPO.
Praveen Suthrum: My company, NextServices recently partnered with Gastrologix and several others to launch this infusion offering. So, I want to talk a little bit about that and ask you what exactly that is about? And how does that benefit GI practices that want to start infusion as an ancillary?
Steve Somers: Yeah so, we recently started an initiative called GastroInfuse and that really was born out of a grown understanding that a lot of practices around the country either don’t support an infusion suite or in some instances don’t maximize that capability and it’s really for those practices that are implementing a well-developed infusion suite. It’s a very important ancillary. So, as we’ve gone out and touched on the GI market we determined that there are companies out there that do provide an infusion services management capability and can come to a practice that doesn’t currently offer infusion services and bring in really a turnkey solution. So, a ‘soup to nuts’ type of approach that really relieves the practice of developing the initiative on its own. So, what we’ve done is sort of taken all the individual pieces that make up an infusion suite, whether from inventory management, scheduling, to Revenue Cycle Management or procurement of the drugs to treat chronic disease. We have just partnered with individual companies in a very transparent way and on a management fee model basis where there’s complete transparency as it relates to the fees that are being paid by the practices so that ultimately as the initiative or the capability matures at the practice, the lion’s share of any profits or revenues is going to the practice as opposed to the services management company.
Praveen Suthrum:  In your own business model Steve, just to clarify how does Gastrologix make its fees or money in this mix?
Steve Somers:  So, Gastrologix… really its role is for the procurement of the therapies. So, as Chris made mention of… we’re contracted with all the major pharmaceutical manufacturers for the provision of those drugs in the infusion suite and that’s really a big source of administrative fees for the GPO. So, that’s really the role that we would play.
Chris Metz:  We do in our opinion two additional initiatives that really bring benefit to the practices. And so, think of it as a three-legged stool. The first leg of the stool is how we are a traditional GPO. We’re formed as a GPO, we have to follow the regulations of GPOs and so on. So, we aggregate the spend, we bring beneficial contracts to the practices for virtually everything that they deal with on a daily basis. But we go beyond that and really act as a business development organization on their behalf and do that in two ways. The second leg of the stool is how we address the ancillary market on behalf of the GIs.
So, traditional ancillaries such as – infusion, pathology laboratories, and so on. We support those for practices that don’t either have those ancillaries or aren’t maximizing those ancillaries. And then the third leg of our stool is we create companies that the physicians can have ownership in. And so, that asset creation opportunity is something that in the long term is going to prove very beneficial to the practices. Examples of those opportunities are… we created about a year and a half ago – a captive insurance company that’s owned by the GI physicians for the provision of medical professional liability. And now, we’re in the process of expanding a second company which is based around data aggregation where we can pull the data out of individual practices and be EMR agnostic and pool that data for the benefit of those groups moving forward with the industry.
Praveen Suthrum: And in terms of whether it be a strategic benefit or financial benefit are you able to share any numbers? Like where a certain practice or at least representative numbers where a certain practice… for them it was costing X amount and then after using the GPO that number changed?
Steve Somers: A practice in the membership was building out a new endoscopy center and had gotten pretty far down the road in terms of the development of that project and we were sort of introduced late to the nurse manager who was really in charge of that effort. However not too late so we were able to introduce her to a number of companies on our platform that were in a position to provide alternatives both in terms of pricing as well as the type of equipment and supplies that they were going to be purchasing. And she had already developed the cost analysis based on her original foray into determining what the cost was of the build-out was. And then, by comparison, we really to do a pretty comprehensive comparison and it ended up saving the practice somewhere between $200,000 to $300,000 in the development of that industry center. So, that was a big win. We just developed a contract with a laboratory supply management company for a practices’ path lab. We recently did a comprehensive comparison there… their savings across the board was between 15 to 25% on what they had previously been spending and that really is not uncommon when we make a comparison with what we’re able to do relative to what practices have been able to do on their own and that’s the goal of the cooperative effort in a GPO.
Praveen Suthrum: What does the future look like at this point of time? I’d like you to reflect both from an industry standpoint but also specifically for Gastrologix.
Chris Metz:  Well I think we’re a young organization and we’ve built out the offering to be comprehensive. Our market share is still relatively low within the independent GI community on a national basis. Obviously, not every existing member right now utilizes all of our programs. So, we have the ability I think to grow with the membership we presently have as well as adding new members in the relatively near future and on an ongoing basis.
Praveen Suthrum:  And you know the whole consolidation which is happening in the industry, how does that play out in the GPO model? Does that help or come in the way?
Steve Somers: Yeah well from our perspective, we don’t believe that the change in an ownership structure in the market should impact our ability at all. Even the largest private equity platforms… it’s unlikely that they’re going to be as large as the physician membership that we already have and the key differentiator there… is that we are a GPO as I referenced earlier is a vendor-funded model so that the buying organization or consortium or cooperative its efforts are funded by industry and that’s simply not the case outside of a GPO structure.
Chris Metz:  We’re private equity agnostic there’s no reason why a private equity-backed practice or platform wouldn’t work with us. We’re only additive in that regard. If they’re able to drive in some ways a better deal for themselves then they can take advantage of that, if we happen to have better relationships or better contracts, better terms there’s no downside to those organizations working with us in that regard.
Praveen Suthrum: This was great Steve and Chris. Was there anything else that you wish to share that we didn’t cover?
Steve Somers: I think we did a good job covering it.
Chris Metz: We appreciate the opportunity Praveen.
Praveen Suthrum:  Yeah. This was fun and thank you so much for sharing your views and sharing more about Gastrologix.
Steve Somers: Thank you.
Chris Metz: Thank you.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
11 Nov 2020

Interview with Dr. Krishnan (PE Platform Peak Gastro): This concept of YOU gave us explosive, unexpected growth

Dr. Prashant Krishnan is the Chief Medical Officer of Gastro Care Partners/Peak Gastroenterology Associates. In December 2019, Peak Gastroenterology partnered with Varsity Healthcare Partners to launch the sixth PE platform in GI.
In this insightful interview, Dr. Krishnan reveals a core strategy (called YOU) that led to their  explosive growth from 4 to 43 providers. That growth opened doors to private equity.
Watch this extremely interesting interview. Do not miss this one (25+ mins)
◘  The story behind Peak Gastroenterology
“Dr. Buck Patel has always been ahead of the curve in terms of technology and how it can advance gastroenterology”
◘ “We transformed Peak Gastroenterology into a relationship-based institution”
◘ “This concept of YOU has resulted in explosive, unexpected growth”
◘  Growth numbers at Peak GI – from 4 to 43 providers
◘  Dr. Krishnan on their hiring strategy
◘  Working out relationships with regional hospitals
◘  Why PE and why Varsity Healthcare Partners?
◘  “We had two full-time jobs and it was difficult to manage”
“They replaced the Avengers with Peak heads and Varsity heads” 
◘  It wasn’t about maximizing money
◘ “Our associate physicians partnered in on the day we transacted”
◘  Peak’s vision for the next five years
“Different patients have different needs and we need to meet them at that need”
“As gastroenterology grows, the influence of PE will increase”
“By making a few operational changes, our volumes went up by about 15-20%”


The Transcribed Interview:
Praveen Suthrum: Dr. Prashant Krishnan from Peak Gastroenterology, I want to welcome you to our conversation. Thanks so much for chatting with us today.
Dr. Prashant Krishnan: Thank you, Praveen. It’s really an honor to be here today.
Praveen Suthrum: Prashant maybe to get us started can you give us a little bit of a background of yourself and Peak Gastro?
Dr. Prashant Krishnan: Yeah I was born in Houston, grew up there for the first few years of my life. Virginia for four years, New Orleans for 12 years. I went to LSU Medical School in New Orleans and then I went to Henry Ford Hospital in Detroit for both my internal medicine and gastroenterology training. And then from there, I moved to Colorado Springs. And I have been with Peak Gastroenterology since October of 2013. Peak Gastroenterology was actually created by Dr. Buck Patel, the founding partner of the practice. Back in 1996, he started this as a solo practitioner covering his own clinic and four hospitals all by himself every single day of the year. And then in 1998, he added a second physician in 2000 a third one. In 2006 he started using Electronic Medical Records before it was a mandate or before it was a fad. He was always ahead of the curve in terms of technology and how it can advance gastroenterology. In 2007 he created one of the first freestanding endoscopy centers in Colorado Springs. And then as I said I joined him in 2013. I was probably 34 years old at that time and I don’t know what it is he saw in me, but he brought me in and every single day for the first week after work he would sit down with me he asked me what my personal and professional goals were? What vision I had for Peak and how the two could intersect? And so, when I started telling him some of my ideas he was really impressed with that and so the two of us started working together, collaborating together on a daily basis, multiple times a day. Every morning 6.30 am phone call to strategize for the day, every night 9 pm phone call to make sure we achieved all of our goals for the day and planned for the next day and the next few days.
And so, we mapped out what the practice should look like over the next one, three, five, and ten years. And to our surprise, we exceeded all of those expectations very quickly. And I think part of the reason for that is the philosophy that the two of us brought to growing Peak Gastroenterology Associates. One of the things that bothered us is everybody in healthcare talks about patient-centric care. That’s sort of the keyword in healthcare. And when we were thinking about who actually executes on this well… there are not a lot of people or a lot of institutions we could think of. And so we started to expand beyond the healthcare field and said who does customer service extremely well? And Buck at that time said that’s the hospitality industry – the hotels, the restaurants, they really make the customer feel like they are at the center of everything they do. The way they brand, the way they treat you. I mean you know as soon as you leave a really nice restaurant or a really nice hotel what chain that is and you’re always wanting to come back. And so we wanted to introduce that level of customer service into healthcare. And the way to do that is most physicians are not trained in business, they’re running a medical practice to the best of their abilities and we wanted to completely turn that around and say we’re going to run a business. We happen to be in the business of healthcare and our focus is on the patient experience and customer service. So, we really transformed Peak Gastroenterology into a relationship-based institution.
Praveen Suthrum: We’re going to revisit that definitely. I want to first start by understanding what that vision was when you were sitting with Dr. Buck Patel and having those conversations what was your vision then and what kind of growth did you see in the last five years?
Dr. Prashant Krishnan: Yeah so, I think in a word if I were to describe what that vision is that word is YOU. Y-O-U. There’s a lot of stuff that goes into that YOU campaign that we created or that YOU concept. And we really made it part of the DNA of Peak. Every single decision that we made from that point onwards, we ran it through the lens of YOU to see how does this benefit all of our partners. And when you’re talking about customer service you’re really talking about all of your different clients that you’re providing a service for. We happen to provide a service in gastroenterology so, we have to define first who are our clients are. And so, our clients are the patients obviously. They’re the most important and as long as we take care of the patients we’re achieving our primary goal. But we do have other clients as well. Every single referring physician, every single referring provider is a client of ours. They expect that we are going to take care of their patients in a way that makes the patient feel good both health-wise and also emotionally. They should feel good about that experience. In addition to that all of the insurance contracts that we have they’re with insurance companies. So, they’re partners of ours we have to be responsible and make sure that we’re doing the best we can for the patients and for all of the partners. And that also includes the hospitals, their administration, and the different health systems. These are our different clients and so, we need to make sure that we’re taking care of everyone. And what this concept has really resulted in has been unexpected, explosive growth. We knew we wanted to grow but we just did not predict how explosive this growth would be for us. And I think that… that was basically because of this YOU concept that we had.
Praveen Suthrum: So, Prashant can you please share some growth numbers that you experienced leading up to the transaction itself in 2019?
Dr. Prashant Krishnan: Sure. So, as I said I joined Buck and Peak Gastroenterology…my official first start date was October 17, 2013, and at that time just before I joined we had four providers in Peak and six years later we were at 43 providers. When I first started we were just in Colorado Springs. Within three weeks after I started, I introduced Buck to one of the CEOs of the hospital in a town called Castle Rock about 30 minutes north of Colorado Springs. And within three weeks we hammered out a deal where we would come out and cover all of the calls, and start the clinic, and do procedures up there. So, we expanded to Castle Rock then we expanded to Woodland Park and then we had to make a decision. There were two opportunities one in Salida and one in Trinidad. Both of them are about two hours southwest and south of Colorado Springs respectively. They asked us whether we could come and help them out over there, take care of their local patients and that’s a long commute.
Round trip it’s four hours and then we would have to go once a week effectively between those two places. And so we needed to make a decision. Is this something we want to do? Where’s the win in it for the patients locally? And that was an obvious answer. Where was the win in it for the hospital? That was a pretty obvious answer. And one of one of the things that I think is really important is Peak Gastroenterology Associates from its inception and especially over the last several years has really focused on giving back to the community. So, it’s not just about taking care of the patients but somehow beyond medicine, also giving back to the community and in this case the giving back here is to make sure that people who normally drive six hours, seven, or eight hours to see us now we’re cutting about two hours into their drive time so that we can see them a little bit more locally, we can take care of all of the basic GI stuff at those locations. If there’s something more complex, yes, they do have to come to Colorado Springs. But this is improving accessibility for patients locally in rural areas as well and then for the more complex stuff, we already can identify them at their location or more locally and then bring them to Colorado Springs to give them the best world-class care that they deserve to get.
Praveen Suthrum: That’s amazing. As far as attracting talent and other gastroenterologists two-year fold. Are they primarily younger gastroenterologists or have they been mid-career? Could you comment on that?
Dr. Prashant Krishnan: Yes. So, I think that primarily they’ve been either younger or mid-career and we’ve done that a little bit by design because what we want to do is create a lot of enthusiasm. We want people who want to come in and they want to just work and make sure that the patients are taken care of. Obviously, we want to make sure that their personal lives they’re achieving everything that they want to achieve in their personal life as well. So, we want a really good work-life balance. I’ll tell you… I have a 16-year-old daughter. I have not missed a single performance of hers in her life. Each year we were recruiting somewhere between four to six, four to seven providers… And it got to the point where we were probably saying yes to one every six to eight applicants that we were interviewing because it wasn’t just bodies that we wanted, we really wanted to raise the level of care. Obviously, we wanted to differentiate ourselves on customer service but all of that can only happen if you’re at least as good as every other practice if not better. And that comes from the quality of providers that you have. So, we started recruiting experts in the field IBD expert Douglas Nguyen, we started looking for advanced endoscopists, Chris Harmon and Ali Siddiqui. We will have an announcement probably within the next two to three weeks. It’s a pretty big announcement regarding an advanced endoscopist. And so we’re really talking about world-class care.
Praveen Suthrum: Prashant, how did you figure out the relationships with your local and regional hospitals?
Dr. Prashant Krishnan:  The hospitals came to us. I didn’t have to figure out how to approach them because they approached us. I think part of the reason is… even they started seeing the success that we were bringing into our own practice volumes at their centers, at their hospitals were going up simply because some of the sicker outpatients that we had to scope, we were taking to the hospital and they started noticing the increase in volume. A lot of practices look at hospitals as a burden because they want to focus on their medical practice, they want to focus on their surgical center and they look at the hospital as something that I have to do so, I’ll take care of it at the end of the day. But if you think about it the hospital has the sickest patients. These people are really sick, some of them are bleeding, and some of them have other co-morbidities they don’t want to be there. And the longer we keep them there the worse the experience for them and so one of the things that we decided is in order to stay true to our YOU concept we need to see these patients, these hospital-based patients the moment they get there. And so, when I’m on call, I will get a call from the emergency room telling me someone is bleeding I usually see the patient in the ER we bring them to the GI lab before they have left the emergency room I scope them, I find out what’s going on. If it’s a low-risk lesion and the patient can go home then typically the hospitalist has enough time, to admit them, check their blood counts, and within you know, six hours to eight hours they’re on their way home. And so what we did is, we agreed with the hospital we’re going to keep someone physically at the hospital at all times that’s to make sure that we’re instantaneously responsive to the needs of the patient.
Praveen Suthrum: And the hospital never thought about either competing with you or starting an independent GI department, staffing it on their own? Did that ever happen?
Dr. Prashant Krishnan: So, every hospital has that capacity, right? They do have the ability to staff their own physicians but hospitals are really good at certain things and those things tend to be hospital-based stuff, inpatient-based stuff. For a hospital it’s broad-based and it’s typically the sickest of the sick. But when you talk about gastroenterology which is 85 percent outpatient and most of these patients are not extremely sick it’s a very different type of patient population that you’re dealing with. GI is a very fast-paced field. EGDs take us 5, 10, or 15 minutes. Colonoscopies may take us 15, 20, or 25 minutes. So, these aren’t the surgeries that are going to last for three, four or six hours and so, we get through our patients fairly quickly. So, typically we have one patient scheduled every 30 minutes for procedures in the surgical center, for the clinic, we will see patients every 20 minutes and so a hospital is not good with maximum efficiency and from a patient’s perspective when they’re not feeling well and they have 10 other things that they want to do, they don’t really want to be at your office they’re there because they have no other choice. They’re feeling miserable, they’re feeling sick. It’s not like they’re coming just to say hi and how are you… they have a problem, they want to be addressed. But they want that addressed in an efficient manner so they can go take care of that ten other things that they have to do during that day. And if you go to most doctors’ offices and I hate to say this but go to any physician’s office and typically you’re never seen at the time that you’re scheduled for. In any other profession, you would lose that customer but in healthcare somehow patients still come to us when we’re not punctual. I actually walked through the office with Buck two or three times as though I was the patient and the first time it took an hour and 15 minutes and this was… I was their boss and so my guess is they pushed me through faster than they would a patient and so we said this is completely unacceptable. We met with the entire team in the lobby of the office and said what is it that we can do to improve their experience? And we got buy-in from the staff too because they gave some of these ideas and we started changing the processes around, the paperwork around. And so, our goal was 30 to 35 minutes for an established patient that does not have to fill out any paperwork and that’s for everything check-in, being brought into the exam room, seeing your provider, the checkout process, and then 45 minutes for a new patient.
Praveen Suthrum: Let’s get to the private equity portion. How did you make that decision with Varsity?
Dr. Prashant Krishnan: Yes. So, I’ll go a step back first. How did we even decide to move forward with private equity? And then why Varsity out of all of the options that we had. So, as you grow a practice we were at 43 providers spread out across the state with over those years as we grew and Smita Patel who also was the founder of Peak Gastroenterology, she was the chief operating officer the three of us had to manage a practice that was growing faster than we had expected not just in the number of providers but the geography as well and so we would have regular meetings with the CEOs of the hospitals to make sure that everything was going well. Sometimes we would have to travel for two hours to meet with these administrators after work. So, we’d get there at seven o’clock, have a meeting until eight o’clock, turn around and come home. And almost every day Buck and I were coming home at 11 pm or 12 pm. We had two full-time jobs and that’s very difficult to manage. And in addition to that, we started having opportunities outside of the state of Colorado people and other health systems from outside of Colorado approached us and asked us to do stuff for them and we did not have the number of providers to be able to do that yet although that was not concerning for me because you’ve seen our recruitment success story. But what was concerning is how do we spread ourselves out to other states now and still stay full-time clinicians? I love being a doctor. Buck, I don’t think we’ll ever quit until he’s dead. I mean… he just really enjoys being a physician. And so, how do we go to other states? And then they want to build other surgery centers which costs money and they want to do joint ventures and so you’re talking about physicians having to pony up 50 million to 75 million dollars of cash we just don’t have that type of capital. And really the patients benefit from outpatient surgery centers because it’s highly efficient and the cost is really contained and so we had all of these opportunities that we weren’t able to explore in detail yet. And so, this is where private equity came in because not only can they help bring the infrastructure required to run a practice that was no longer for providers but 43 providers and continuing to grow aggressively. But in addition to that, they can bring the additional capital required to actually fulfill all of these other projects that we wanted to be involved in.
And so, that’s how we started looking at private equity. Two of them initially approached us… A huge learning experience for us. I’m really glad that we were able to have those conversations with those two private equity groups. Then, all of a sudden we got requests from about 130 different private equity firms. We had a broker at that point and so he sent a book out to everyone and we got responses back from 130 or so. Of those, half were very serious so, about 65. And Buck and I said to the broker we are really busy we can’t talk to 65 different private equity firms you need to narrow this down significantly. So, he came back to us with 17 and then 10 and then seven. So, we agreed we’d meet with those top seven choices that we had and of those seven choices the very first group that came and met with us was Varsity Healthcare Partners. I still remember it was a fantastic meeting David Alpern who’s one of the founders of Varsity Healthcare Partners was here personally he made the effort to come and talk to us personally and it wasn’t just talking to us he listened to us he heard our story and he understood why it was so important to us that this legacy that we had been creating continues in a very positive and upward trajectory. And so, he was very thoughtful he understood why it meant so much to both Buck and myself and to Smita and he also conveyed that it is important to him that he helps us reach our goals and it really mattered to him. I mean it wasn’t just words you could see it in the way he was talking. And we did a lot of research into Varsity Healthcare Partners. We talked to several other practices that had been involved with Varsity in the past nothing but glowing comments from all of these providers. David did not restrict us as to who we should be able to talk to. He said to talk to any of my physicians and that’s what we did and that’s the same policy Buck and I had so we really appreciated that.
David Alpern brought Ayush Singhania with him and it was just there was chemistry between David and Alpern like there was chemistry between Buck and myself and there was also the chemistry between our side and their side immediately. And so, as soon as the meeting was over and they left, Buck just looked at me and we were quiet there was sort of this silence in the room and this was the very first private equity that we had met with of these seven and he just said “this is the group” and I said, “how do you know we haven’t even met with the other six yet.” He said “this is the group” and he just left it at that so every time we met with another private equity firm. I used Varsity as the gold standard to compare them with and so we went through the other six, Varsity was still number one for us. We asked the top three choices to come back one more time just so we could make sure that our thought process on this was correct. And the second time we met with the top three we all knew it was Varsity. And they were very happy when they heard that we wanted to move forward with them and when we got their letter of intent, this is how much they understood our practice we play a lot of practical jokes on ourselves and our physicians, they’re all in good fun. I mean we have a lot of fun with each other. And in the letter of intent, this is a professional document, when Avengers End Game came out and there were all of these superheroes on the poster Varsity took all of the heads off of those superheroes and put Peak heads and Varsity heads and sent that as part of their letter of intent. So, it was apparent they understood the culture of Peak and our physicians and that was really important to us because what we wanted was further growth in the same way that we had already created historically. We didn’t want a complete change in the trajectory. We thought a lot of what we’re doing was fantastic and there were some things that we could probably do better. We wanted them to work on those things that we thought we could do better on and not to change the things we thought we were doing extremely well on. And so, that was Varsity and we chose extremely well. And I’ll tell you this is how much we liked Varsity they were not the group that offered us the most money. For us, it was not to maximize money. It was to truly find a partner to help us accomplish all of these goals – we wanted to grow, we wanted to expand, we wanted to participate in a lot more endoscopy centers, we wanted to partner with hospitals so that we can deliver better GI service lines for them.
Praveen Suthrum:  A lot of the private equity conversations when practices are deciding, you know, whether to go for it or not, the question is how about the younger physicians versus the ones who are retiring but plus how about the future physicians who will be joining the practice? So, how did you navigate all these decisions?
Dr. Prashant Krishnan: Yes, so, again our practice tends to be young heavy. Most of the physicians are in their 30s or 40s a few of them are in their 50s and we probably have two of them in their 60s we want people that are going to be here 15-20 years because once you invest a lot of time and hard work into these really good physicians, you want that this to be their final home for their professional career. And so, one of the things that we did is… we transacted on December 6, 2019, and instantaneously we made all of our associate physicians’ partners so they partnered in on the day that we transacted. So, they are partners in Gastro Care Partners. Our platform is called Gastro Care Partners and all of our physicians partnered in into Gastro Care Partners. As far as new physicians coming in they have the same ability to partner in and private equity is a new concept for gastroenterology, relatively new and so, it takes some time and some understanding to explain this to new physicians coming in.
When you come in and join a typical medical practice by the time you partner in you’re having buy-in to the practice, you’re having buy-ins to each endoscopy center, to anesthesia, and pathology. These are all separate buy-ins and sometimes it becomes cost prohibitive especially if you’re young and you haven’t had time to save up money. It really hinders your ability to partner in when the amounts get to be obscene and so one of the things that we’ve done is everything sits underneath Gastro Care Partners. And so, you’re going to partner in as a new physician directly into Gastro Care Partners which means you are now part-owner of all of the entities that sit below Gastro Care Partners – that’s the medical practice, every single endoscopy center, and not just the current ones all future endoscopy centers too. It’s like buying stock in Apple let’s say when you come in whatever Apple owns if you buy stock in Apple you’re part owner of everything that Apple owns as well. It’s the same thing with Gastro Care Partners. You have shares, the share price is whatever it is on the day that you want to buy-in and we open it up every single year so that you can buy-in to the company and so as the company continues to grow, your equity in that company continues to grow as well.
Praveen Suthrum: Okay. Where does the story go from here, Prashant? What is your vision for the next five years or beyond?
Dr. Prashant Krishnan: 2020 has been a very unique year. Obviously, COVID hits and it really changes not just healthcare but the entire country, and the entire world. And so, we were very fortunate to have already partnered with Varsity because when COVID hit, they immediately stepped up. We never had to worry about any sort of financial crunch. We knew that we had enough capital to keep us going at least through the end of 2020 if not further. And so we were very confident that as long as we worked hard, and provided the level of care that the patients deserve, the finances would never be an issue and our focus could stay with the patient.
So, the vision for me and for Varsity and for Gastro Care Partners and Buck I think is obviously nothing trump’s making sure that the patients are taken care of and they get care the level of care here has to be equal to or greater than any other place that they can go to. Part of that is expanding that footprint so that we can deliver that type of care everywhere and so we will be expanding beyond the state of Colorado to other locations. And our goal is not to standardize medicine so that everyone gets the exact same care because the needs of patients are not the exact same. Different patients have different needs and we need to meet them at that need at what they need. And so we want to make sure that the floor is set so that everyone inside Peak never drops below a certain threshold of the standard of care. But we want to make sure there’s never a ceiling placed on any of our providers because we want them to be able to achieve everything that they can possibly want to achieve and the higher they go who’s the beneficiary? It’s the patients, they win.
Praveen Suthrum:  Wonderful. Any final comments, Prashant, that we didn’t cover?
Dr. Prashant Krishnan: I think that the next few years are going to be exciting for medicine in general and gastroenterology specifically. Everyone has a choice. All the practices have a choice and they need to figure out what it is they want to achieve? What’s their goal? Do they want to maintain the status quo? Do they want to grow? Do they want to bring physicians that are experts in their field to deliver the best care possible? And based on what it is they want to achieve, they can make the choices that are paralleling their goals. But as gastroenterology continues to grow private equity is going to dominate this field, the influence of private equity will continue to increase over the years. And who you choose is very important because what you want is someone who’s truly a partner that will lift you up where you need the lift but never compromising on your ability to do your job as a health care provider. In fact, you want someone who’s going to raise your ability to do your job as a health care provider and that’s where your focus really needs to be. And your focus can only be there if you choose the right partner, I’ll tell you just having Gastro Care Partners help us manage Peak in the last year everything that we’ve been doing over the last few months. All we did was change a few operational issues that we never thought about but people who are really experts on these operational issues came in and showed us making a small change here, tweaking something there, really changes everything. In October, simply by making those small changes the volume of patients, we saw in the clinic, the volume of patients that we scoped at the surgery center, even at the hospital has gone up by about 15 to 20 percent. That’s a big deal. Why is that a big deal? Because those patients that are waiting two to three months to see a provider now can get in much faster.
Praveen Suthrum: Dr. Prashant Krishnan, thank you so much for sharing your story. I had a lot of fun understanding and also getting your perspective on where you’re coming from. I’m sure the GI community will enjoy listening to your views. Thanks so much for having this conversation.
Dr. Prashant Krishnan: It’s really been a pleasure talking to you Praveen. I really appreciate the opportunity. If you or any of the listeners have any questions please feel free to contact either me or anyone at Gastro Care Partners and we’re going to be there for you just like we are for the patients.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
03 Nov 2020

Interview with Dr. Ivo Boškoski: “We are facing a dramatic situation, but the drama is still to come” (on COVID peak in Italy)

Dr. Ivo Boškoski is a Consultant Gastroenterologist at Fondazione Policlinico Universitario Agostino Gemelli IRCCS, Rome. The Gemelli University Hospital is the second-largest hospital in Italy and one of the largest private hospitals in Europe. With 23,000 to 25,000 annual cases, their endoscopy unit is one of the largest in the world.
As of this writing, we don’t know whether the third wave of COVID in US will peak this winter. But can we be prepared in case it does? Where better to look than Europe? UK, Germany and France are in going into a lockdown again.
Dr. Boškoski feels Italy will follow the other countries in a couple of weeks. He’s working in a red-zone now. In this interview, he tells us of his first-hand experience about the situation in Rome. Learn how his endoscopy division is preparing for what’s to come from mid-November to December.
Watch this timely interview to prepare your practice if the situation changes in your region.
◘  Effect of COVID right now – insights from the red zone (Lazio region, Italy)
◘  “These are unprecedented times and we do not know how this will evolve”
◘  “We can expect the peak in Mid-December”
◘  “We are facing a dramatic situation, but the drama is still to come”
“I’m afraid it will already be too late” – For people who haven’t got their colonoscopies done in the last six months
◘  “We do not have enough resources”
◘  92% of loss of volume – from 23,000 endoscopies per year (pre-COVID)
◘  How are you preparing if the situation peaks?
◘  How Dr. Boškoski’s unit is managing their economics
“We simply treat cases and give maximum care to everybody. We’ll see what will happen”
◘  Future of GI from Dr. Boškoski’s lens – This is the time to Scope Forward




The Transcribed Interview:
Praveen Suthrum: So, Dr. Ivo Boškoski thank you so much for joining me on this conversation. You’re speaking from Rome, Italy today and I wanted to start by welcoming you first.
Dr. Ivo Boškoski: Thank you.
Praveen Suthrum: How is the COVID situation in your area right now?
Dr. Ivo Boškoski: Well, my area here is the Lazio region. You know, Italy is divided into regions, and the Lazio region is a red zone. So, I am in the red zone right now. And the hospital where I work is the biggest hospital in the region and I can say in Italy it’s the biggest Oncology Board. And right now, we are facing a dramatic situation from several points of view. The first one is that we are in a very crowded area. All the patients are coming here. There are several hospitals in Rome and in the region but we’re most hit by the crisis. And the second is that many doctors and nurses are positive. Some of them are in critical situations and every day there are different departments that are closed. So, for instance, today I was supposed to meet a guy from neurology to work on a stem cells project. He just sent me a message saying that he’s in quarantine, that he’s positive and that’s it. We cannot meet. He can’t even talk because he’s coughing all the time.
So, this is unprecedented times and unprecedented situations. We do not know how this will evolve. We can expect the peak of this situation in mid-December if not earlier. We are facing a dramatic situation now but the drama is still to come. From an endoscopy point of view, I can say that now we are doing endoscopies to people that strictly need it – to bleedings, to cancers, and situations that cannot be postponed, and what we are postponing is fecal blood positive testing. You have Cologuard in the USA; we do not have it here. But if somebody has an indication to colonoscopy it is right now, that’s not the case. All these people who got their colonoscopy in probably in six months and for most of them it will be too late, I’m afraid. So, the number of deaths is not directly only correlated to COVID but to what it will provoke in other sectors.
So, from one point of view, it is an unprecedented economic crisis. From another point of view, it is an unprecedented humanitarian crisis with all this suffering and in the end, it will hit also the future of everybody from surveillance point, from follow-ups. The second very important point is that every hospital is dealing with car accidents, routine surgeries, appendicitis, cholecystectomy, oncological patients, etc. If we consider urgent surgeries and urgent medicines for people seeing diabetic ketosis, people that need urgent care, this is the point. And even if today somebody who came to the hospital with a heart attack there is a high chance that they cannot be seen immediately because there is somebody that is not breathing due to COVID. So, this is the drama of this situation.
Simply we do not have enough resources. We are in the richest country in Europe, in the richest continent. We have medical treatments that are avant-garde. Any kind of oncology treatments, drugs of the future, and so on. But we can’t deal with a situation that is a pandemic. Infectious disease… that from one point of view is really simple. It’s an infection. You need to do prevention. You don’t need to do complex surgeries. You don’t need complex drugs. You need prevention. You need to wash your hands, wear a mask; don’t meet people, and so on. This is the cheapest and easiest way of prevention. But still, we have a high impact on the society and the hospitals and everything.
Praveen Suthrum: In the GI department itself what kinds of volume are you seeing now compared to last year same time and compared to the first wave you know, when COVID began?
Dr. Ivo Boškoski: So, the center where I work is a digestive endoscopy center. It is one of the biggest centers in the world with a net endoscopy volume of 23,000 to 25,000 endoscopies per year. We do 1,300 ERCP procedures. We do three to four thousand endoscopic ultrasound procedures and the rest is colonoscopies, gastroscopies, and polyp resections, complex ESD (endoscopic submucosal dissection), and bariatric endoscopy, and all that. So, if we compare that numbers to March, our calculation is of 92% of loss of volume – only for March and April. Then in May, June, and July, we had a rise of the cases and now we are again in the decrease. Not like in March because we are doing also routine cases. But those have been decreased for 20% overall. So, compared to last year we are around 60% and this is only for gastroscopy and colonoscopy because ERCP is done for people that really need it – cholangitis, cancer, and so on. There is no diagnostics ERCP, operative is operative and it doesn’t have an impact. We also published about this in different papers. The impact is important especially from an economic point of view because this revenue from what endoscopy gives is not the same from the last year. And on the other hand, we have costs. We have costs on training, on donning and doffing. We have the costs of personal protective equipment. We have the cost of disposal of personal protective equipment. And we give the cost for people that can’t work and are staying at home because they’re in quarantine, infected and it’s a disaster.
Praveen Suthrum: And you’re expecting the situation to peak now in mid-November onwards towards leading up here. How are you preparing from a GI department standpoint? You know, in case it peaks.
Dr. Ivo Boškoski: We are prepared. We had all the time been prepared since March. So, now we are doing procedures with two masks. One is the N95 and over that, we have the surgical mask because we are in a strict contact with the patients. And we have a program for out-patients and in-patients. And it is different. For the outpatients, there is a dedicated personal also this is a cost that is phone calling the patients at home making an interview if they have been in contact with somebody if they have symptoms, and so on. Then they come to the hospital and there are three separate zones. In the first zone, they get interviewed again. Let’s say today the patient has a gastroscopy or colonoscopy and they get the interview then we do a rapid testing. Now we have also RNA rapid tests and they wait 15 to 30 minutes for this. And if it’s negative then they go to endoscopy. They come in the suite; an endoscopy is performed. And for the in-patients, they go to RNA based testing for the virus, for the Sars-Cov-2 then they get hospitalized. And if there is a procedure that should be done let’s say two days after the initial testing, they get another test just before the procedure in order to be sure that they are not positive.
We have more than 50 operating theaters for surgery. Now we have eight endoscopy theaters and many other rooms for procedures. This is a very big hospital. We have 1,800 beds and we have three dedicated operative theaters for COVID positive patients because if somebody has COVID and needs an urgent appendicectomy you do it. Urgent gastroscopy we do it. So, procedures are done all the time and if we do not know if the patient is positive or negative, we treat those patients as positive. You need all the equipment and this is costs.
Praveen Suthrum: Yeah, and so coming to the cost. How are you managing the economics because your budgets have increased and I’m sure what the department earns would have dropped. So, from that standpoint how are you planning and managing that especially in light of what is going to come. You know we’ve seen one or more waves depending on how you count the wave until now but from this point on expecting the situation to peak again. How are you managing the economics of this situation and again drawing it to GI in particular?
Dr. Ivo Boškoski: In March, we were suffering from the lack of PPEs (personal protective equipment), and also, we came with a publication in gastrointestinal endoscopy on methods and ways to reuse respirators and so on. Fortunately, today this is not the case because our hospital made the reserves of all the PPEs and this is an important cost. This is a private entity that gets money from the region and we still haven’t been paid for this. So, the hospital is going with its own funds. How do we manage it? We simply treat cases; we give the maximum of the care to everybody and we’ll see what will happen. The management is aware of not wasting unnecessary PPEs and everybody knows that it should not be wasted. We are very sensitized on that and from time to time we go for trainings in donning and doffing because many colleagues have been infecting especially during doffing and during removing all the of the equipment because if you remove it in the improper way, it is the moment that you get infected.
Praveen Suthrum: Yes, it is a pretty serious situation. I wish you all the best doctor. So, I wanted to spend a moment and switch gears a little bit and ask you – in the light of the future of GI… on what your thoughts are? Now you know, again thank you for reading the book Scope Forward. So, I’m curious to know what you think applies in a European context and what do you see as the future from your lens?
Dr. Ivo Boškoski:  So, it is a very exciting time to be in the interventional gastroenterology world also in the diagnostic world because there are many new things coming from the devices’ point of view, from artificial intelligence, deep learning, and so on. So, still, nobody managed to write a book like that here in Europe and this is something that we need right now. So, I really did read it with pleasure and it’s like the missing ring between what we have and what we’re doing. But when you’re reading it in a book that has thoughts that somebody has already elaborated it’s very useful for interventional endoscopies like me dealing with new technology. My world is new technology, applying new things to what I’m doing and so on also the team where I work. So, I really appreciate your efforts and I simply loved it. It’s what we need right now especially in this… We need to look forward not only to scope forward. We need to look forward. Scoping forward is very important but looking forward to the future is also important. This crisis will pass sooner or later and we need to be ready when we will be there.
Praveen Suthrum: Thank you Dr. Boškoski. Is there anything else that you wanted to share before we close?
Dr. Ivo Boškoski: You should translate the book into Italian.
Praveen Suthrum: Yeah, I should. I should find somebody to do that yes. Thank you so much.


By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
30 Oct 2020

Interview with Dr. Ellen Scherl: “We must reclaim our roles as healers”

Dr. Ellen Scherl is the Research Director and Founding Director of the Jill Roberts Center for Inflammatory Bowel Disease (IBD), Weill Cornell Medicine. Dr. Scherl has recently been honored with the Rosenthal Humanitarian Award from the Crohn’s and Colitis Foundation. Dr. Scherl is known nationally and internationally for her work in the field of IBD.
When I asked Dr. Scherl about her journey from English literature to gastroenterology and IBD, she surprised me talking about Virginia Woolf and the exploration of self. She also revealed how she stays on top of her game – even during a pandemic. From digital food and hydration apps to her research on meditation and IBD, listen to this fascinating interview completely.
Finally, Dr. Scherl described her vision for the future of gastroenterology. She says, it’s time for gastroenterologists to approach GI care comprehensively and reclaim their role as healers.
◘  Dr. Janowitz: The art of the GI consultation (“listening to the patient is key”)
◘  Dr. Scherl’s journey from literature to medicine and then onward to IBD
◘  “The hope from what I’ve learned as a literature major to telemedicine in the pandemic is that we can reach more people”
◘  What is “self” and its correlation in medicine?
◘  “We are a minority of ourselves” (microbiome)
◘  “Personalized medicine and comprehensive care in gastroenterology and in IBD”
◘  “The future of gastroenterology is to reclaim our role in society as healers” 
◘  Advice for gastroenterologists to stay on top of the game
“Sempre avanti: Always look forward”
◘  What is the future of gastroenterology?
◘ “We need to increase efficiencies and break away from silo management”
◘  Convergence 1.2 to Convergence 1.3 (digital biology)
◘  Advancing care amidst COVID-19
◘  Business of medicine and the healing when it’s in conflict
“We cannot do this if there’s no incentive”
“We all want to be better than we are now”
◘  Changing patterns in IBD



The Transcribed Interview:
Praveen Suthrum: Dr. Scherl, thank you so much for joining me today. And I want to welcome you to our conversation. But before getting started I want to convey my deepest congratulations on the Rosenthal Humanitarian Award that you’re going to receive from the Crohn’s and Colitis Foundation. So, congratulations and welcome.
Dr. Ellen Scherl: So, I started out always actually doing science – Chemistry, Biology but literature was something that I thought I needed to improve my analytics skills with. So, I became a literature major and my area of concentration was actually Virginia Woolf and her symbolist novels. One of the things that always struck me as I was reading her books, novels, as well as her biography, was that despite her connection or seeming connection she was very much alone very isolated. And despite reaching out to the medical professionals I’ve always been struck that they could not help her. Virginia Woolf also talked about thinking in wholes, understanding things from A to Z. And I think that one of the aspects of her medical care was that there was no comprehensive care at the time that she was writing and living. And the hope is that what I’ve learned as a literature major to telemedicine in the pandemic is that we can reach more people.
In terms of my interest in inflammatory bowel disease, I think that from literature I’ve always been fascinated by the ‘self’, the evolution of self, inward introspection, reflection. And so, it is only natural that number one, I should select a subspecialty where I can do just that but also a subspecialty that allows us to actually look inside through endoscopy which you have written about in your Scope Forward. But also a field that focuses on immunology. In 2002 the cover of the science magazine, of Narcissus gazing into a pond looking at his reflection, it’s a painting by Caravaggio but it speaks to the importance of self and self-recognition, the importance of immune surveillance, the importance of self and reproduction, how we reflect and then of course how that impacts communities and engagement of communities and then the introspection of defining who you are as an individual by looking at yourself. And that is how I sort of got from literature and listening to stories that have to do with self to becoming fascinated by the immunology of inflammation and inflammatory bowel disease and how it affects individuals and then of course the importance of endoscopy.
Praveen Suthrum: Quite fascinating and it just compels me to probe further on you know on this topic of self. And then when you consider the cell you can look at it in multiple directions here and you alluded to it. From a very science standpoint and look at the microbiome. Put into question you know are we really human or you know, 90 plus percent is the microbiome. So, we’re all microorganisms more than we’re human like so if that’s our DNA. So, then what is the self from that context.
Dr. Ellen Scherl: So, the concept of the microbiome is critical to our understanding who we are and as you say we have more bacterial DNA, more bacterial cells than we do immune cells or human DNA. So, in fact, as you said we are a microcosm of who we are. We are a minority of our self. So, it is important to help us to redefine ourselves from a scientific molecular cellular basis. If we look at artistic renditions of who we are… we go back to the Klimt painting – woman of gold which was Adele Bauer where if you look at her dress it is multiple triangular and circular cells namely sperm and egg cells. So, again the concept of cells and self and in reproduction. So, the idea of redefining ourselves not only by more bacterial DNA but also through the human genome where we understand that 99.9% of our DNA is all the same. We are more alike than we are different. The 0.1 that codes for difference, that is different… codes for disease susceptibility and therapeutic response. So, again what does that mean today for gastroenterology for IBD? That we have to be talking about personalized individualized medicine. And looking at the cells and molecules that drive different inflammatory pathways if we’re looking at IBD but of course, there are other chronic diseases and illnesses where this is also at play now.
But step back and look at personalized medicine, individualized medicine, what is it really about? Yes, it’s about cells and molecules and how we define ourselves scientifically and diversity plays into that. But most importantly personalized medicine is about the person it’s about comprehensive care. It’s about healing. And I think that one of my hopes is that telemedicine can bring us closer to healing. I think that the future of medicine, gastroenterology is to reclaim our role in society and with individuals as healers. And for that to happen we need to recognize that’s not the way we as gastroenterologists are viewed. We are looked at as you know people who are pushing tests and medications and patients trust their individual gastroenterologist but they don’t necessarily trust the field of gastroenterology or medicine and we need to reclaim that. So, if we go back to the Greek heal means to make whole that is what comprehensive medicine is and I think that part of the future that telemedicine can help to accelerate is by making those connections so that we can reclaim healing for our individual patients and for communities at large locally, regionally, nationally, and actually globally.
Praveen Suthrum: From the time I’ve known you know, I think it’s eight to ten years now. So, I’ve always observed that you’ve been on top of your game. Observed that your interactions are very compassionate and at the same time as far as the science is concerned you’ve been on top of your game. And even listening to your recent interview you know, you’re testing new things, new ideas, new technologies, applications, and so on. So, what advice do you have for gastroenterologists out there who are watching this on how do they stay on top of the game?
Dr. Ellen Scherl: In the continuity of what we were saying, it’s that self-actualization you know, be true to yourself in the Shakespearean sense know who you are as a physician. Because we can’t really heal unless we have that focus of who we are as defined by our important most important connections – family, friends, and then we widen it to our workplace which is of course being redefined and our patients and their families and friends. What are the support structures? Where are the weaknesses? How can we strengthen them? So, that’s the first thing I think to take time for ourselves.
And the second is to find young people who can help us learn the technology, learn how to use digital apps, the healthcare electronic medical records. Sempre Avanti: always forward. So, we’re always looking for how we cannot only improve ourselves but improve ourselves as we are defined by the technology which is here to help us make connections with the people that we reach out to. They can be younger medical students, fellows, young attendings, but also our technicians our staff and it becomes much more fun and much more respectful because we are really talking about people. Yes, degrees are still important. Of course, algorithmic medicine is still important. But it’s making those social connections and figuring out how we can widen those social connections to reach people even around the globe but in our own societies who may not have the ability to reach out and come in for even a televisit.
Praveen Suthrum: What is the future of GI from the lens that you’re seeing?
Dr. Ellen Scherl: So, the future… it breaks down into three things but just taking this comprehensive care that is the future of GI. So, we have not really embraced it, although we talk about it we have not really reached patients in the sense of healing and in the sense of comprehensive care. So, in 2006 we opened the Jill Roberts center. Again, Jill Roberts was a grateful patient who was an inspired collaborator and I know you met her so you understand that it was not just her understanding that the secret in patient-care is caring for the patient which she really did she was a tremendous patient advocate but she also was a program builder and she was able to delve into the science which is true for all physicians but she was also interested as you know in the finances and the economics too. When you came in and this is the future of medicine, you came in maybe 10 years ago or so as a consultant but it was really to increase efficiencies and break away from silo management which Jill felt was a real hindrance to delivering comprehensive care. And seeing Jill progress from patient to patient advocate to scientists to economist to really everything, has been a labor of love but also underscores an important point for all of us there was no task that was too small for Jill and no project that was too large. And I think we need to think about that as we look towards the future.
So, one future is comprehensive care both real and virtual. The second future is when we talk about convergence. How do discoveries get made? Susan Hockfield’s book ‘The Age of Living Machines’ the impact of biology on technological revolution is applicable to gastroenterology and specifically endoscopy when we bring the surgeons and the endoscopists together so that we can merge that field as Bo Shen, MD is doing with the surgical knowledge of anatomy it’s beyond advanced endoscopy. It really requires close collaboration with a surgeon and we’re fortunate to work with Bo Shen at Columbia with Ravi Kiran, MD who is the head of their colorectal surgery program and actually the fact that the two of them are so interconnected is wonderful for pushing this field forward.  It also raises the question of what is the role of nanotechnology. What can we deliver through the endoscope? And we need forward-thinking advanced surgical endoscopists to help to move that field forward and redefine that frontier.
Convergence 1.2 is the interaction of biology and technology and that’s where we are now. But I think convergence 1.3 is going to be the interaction of biology and nutrition, food, exercise, hydration, the science of all of those. And of course the impact of or the interconnectivity between biology and economics which is where you come in and you are helping to move this forward. First is comprehension two is combined surgery endoscopy and the third is the concept of personalized medicine where we’re talking about the definition of molecular and cellular phenotypes that define for our case in inflammatory bowel disease the immune response, the immunology of inflammation, where does the microbiome you know activate this, and this is something that Randy Longman, MD who is the current director of the Jill Roberts center. He is a card-carrying immunologist and gastroenterologist so talk about convergence that’s converging. And he has set up a smart IBD program where we look at the cells and molecules before and after an intervention of a biologic therapy so that we can determine which patients are going to respond or conversely not respond and because IBD is a lifelong disease this is a longitudinal project so that as their responses change and as the science advances we might be able to predict more targeted therapies in a wise or smart way instead of just saying this is the algorithm.
Praveen Suthrum: Very interesting and I know that you advanced some of this during the COVID period. Can you share a little bit about how this whole phase has been for you?
Dr. Ellen Scherl: So, first of all very difficult the pandemic has been monumental. Much in the way as other disruptive technologies have occurred because of major disruptions and upheavals. When this started and we were all quarantined we didn’t know how to reach our patients and of course, telemedicine was the only way to do it. And during those three months, I sat and did back-to-back televisits and I found that several things happened. First of all, it was a lifeline for patients and it was very reassuring for them to be able to talk, to share their lives, share their family, and have their medical questions answered but also some social questions. And it became apparent that this was a way of reaching other systems that might address some of their concerns like Dr. Richard Brown and Dr. Patricia Gerbarg’s site which is a practice of sort of breathing meditation where the breath exercises are specific for the gut. We’ve worked with Dr. Brown and Pat Gerbarg and did an original study where we paired patients with each other and did a comparative it was a controlled trial where either the intervention was this breathing mind-body exercise or education for the same amount of time, the same food was served, everything was exactly the same the only difference was the intervention and we were able to show that there was no question that the quality of life.
Depression improved, insomnia, anxiety, all improved there was a glimmer that maybe inflammation improved which is something that we still want to do. And as Drs. Brown and Gerbarg have moved their practice from real to virtual, this becomes a lifeline for patients and I realized that as we were doing these three-month intensive video visits. So, that was one thing that I could recommend Wellness by Food was another app for IBD that they found helpful and interactive. And the third is this Plant Nanny which was a hydration app. What I’m still looking for is an exercise app. But the point is that during that intensive, non-stop, back-to-back video visits at the end of the three months with Dr. Dana Lukin and Dr. Randy Longman we were able to collate our data and publish in gastroenterology May 2020. We could show the question that we were all so concerned about at the beginning of this pandemic which was – are our patients at increased risk if they’re on biologics? And we were able to show that it was very reassuring you weren’t at lower risk but you also were not at higher risk.
Praveen Suthrum: One question I want to ask you Dr. Scherl is how do you reconcile between the business aspect of medicine and the care aspect or the healing aspect of medicine? And sometimes, these two goals can come in conflict. Because that’s the way we have structured our health system for good or for worst. When you combine some of these therapeutic interventions that you’re mentioning, we’re talking about disease reversal here. Gastroenterologists do recognize this that if they don’t do that then they miss out on the future direction of where the patients want all of healthcare to go but then it is also going to come at the cost of how the health system gets compensated today.
Dr. Ellen Scherl: So, the way that that health care gets compensated today has changed with the pandemic. In 1991 PDFs were available and yet we could not implement that into our Electronic Medical Records because of compensation. There was no compensation for a video visit or a telephone visit or an electronic PDF assessment. And what the pandemic has done is to reimburse we can see across borders state borders. So, it has opened up our ability to reach larger groups of population of patients and maybe we can even start to do that globally. So, the reimbursement structure is going to need to help and I know you’re going to be on the forefront of that but it is critical from an economic standpoint.
We can’t do this if there’s not some economic reimbursement and incentive for keeping our patients connected and healthy all of our patients. And one of the things that the pandemic has done while it does advance the economics arguably of telemedicine it also underscores the disparity in gastroenterology, liver diseases, and IBD that the pandemic is bringing to the fore. So, these societal issues need to be addressed. We talk about disruptive technologies the pandemic has accelerated the disruptive technology of telecommunication, telehealth. The hope is that we’ll move away from the complexity of silo management and reduce complexity and allow us to connect with people which is comprehensive care and what needs to happen and it needs to be rewarded. So, this is restructuring the economics of what we do and because we all want to be better than we are now. Better than ourselves, we want to believe in something that’s larger than ourselves. Larger than ourselves is using our techniques as endoscopists but understanding that they may be more targeted.
Praveen Suthrum: Now, in your field of IBD what are some of the changing patterns that you’re observing?
Dr. Ellen Scherl: We talked a little bit about how this is becoming a global disease where patient populations or populations that never saw Ulcerative Colitis or Crohn’s disease are now seeing Ulcerative Colitis first and within a decade Crohn’s disease follows. But we also are recognizing that it crosses the spectrum of socio-economic divides. And in many ways, you can look at Inflammatory Bowel Disease as an equal opportunity employer. It has most recently affected the Prime Minister of Japan Shinzo Abe. It affected President Eisenhower. President Kennedy, we think might have had Crohn’s disease may be overlap with Celiac but all these intestinal diseases… And then, of course, going way back King Alfred. So, Kings, Prime Ministers, Presidents, and then everybody along the social spectrum. So, it really affects everybody and that’s something that we need to address in our treatment algorithms and when we look at evidence-based medicine and how we can improve the experience and healing for patients.
Praveen Suthrum: So, I want to go back and complete our conversation by reflecting on the point about the self that you brought up right in the beginning. So, there’s a part of the self that resists change. And any sort of change. And this self can be an institution this self can be an individual or a physician, a patient, or even society at large. If I’m resistant to change what’s going to happen next?
Dr. Ellen Scherl: So let’s look at our genes okay. So, 99.9% of our DNA is all the same. Our genes evolve very slowly. Over maybe hundreds or thousands of years. And yet we are seeing diseases evolve much more rapidly and if you take IBD it looks like a global pandemic. It is now all over the world. We used to think that it was mostly northern Europe, the Ashkenazi Jewish population but now we see that it is in populations that were never affected by IBD – Japan, the Arab nations, China, India and the incidence is escalating. So, yes the genes don’t change. You have your genes whether they confer susceptibility to IBD or not. Your genes come with you and they stay stable, they resist change however or they change very slowly. What accelerates the change is epigenetics what turns those genes on and off. And right now with the escalating Diabesity epidemic with Inflammatory Bowel Disease becoming like a global epidemic and I’m saying global because there’s it acts almost like an infectious disease or a stealth infection we know it’s not. But the point is things are changing whether we like it or not the more things change the more they stay the same but they are changing. And what’s making the epigenetic changes we think is our food supply. We don’t know what we’re marinating in the processed food what’s even added to foods that we don’t think are processed? And what about climate change? So, all that is going to be changed by the pandemic, right? Less carbon emission, less travel because patients are having more time with video visits or working from home, the workplace is going to change and with that, there are going to be changes in our communities and we need to reach out to patients and people who may not be directly changed but they are our brothers and sisters and we need to help everybody because this is a global change accelerated by the pandemic. But before the pandemic, we were seeing an increased acceleration in chronic illnesses. And the economics of healthcare is going to need to change accordingly.
Praveen Suthrum:  Definitely and hopefully for the better. So, Dr. Scherl, thank you so much for sharing your views our conversation was totally fascinating… reflections from the self to institutions, and society, and science. So, was there anything else that you wish to share before we close?
Dr. Ellen Scherl: Well, I do want to say that the idea of computer science moving these fields forward, looking at digital apps, looking at some of the work that Deborah Estrin has done in our tri-institutional endeavor is all going to move the field forward and we have a lot of forward-thinking gastroenterologists. How we can use telemedicine and I don’t want to say artificial intelligence but certainly technological intelligence to help individual patients I think that’s the key.
Praveen Suthrum: Thank you for what you do and thank you so much once again for sharing your perspective.
Dr. Ellen Scherl: Thank you Praveen, it’s been a pleasure working with you always.



Links to references that Dr. Scherl provided:




By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
06 Oct 2020

Interview with Dr. Joe Rubinsztain, CEO & Co-Founder of ChronWell: “[Be] with patients in their lives, not in your office

Joe Rubinsztain, M.D is the CEO and Co-Founder at ChronWell. The company provides technology-enabled solutions such as Chronic Care Management (CCM) and Remote Physiologic Monitoring (RPM). Previously, he was the President at gMed, which was acquired by Modernizing Medicine in 2015.
In this future-oriented interview, Dr. Rubinsztain walks us through how ChronWell works and their progress during COVID-19. He provides interesting insights into how technology will play a bigger but quieter role in the future.
Watch this insightful interview (18+min) to glimpse into the future of gastroenterology.
“Taking technology from being archival into actionable technology was critical for us”
◘  What does ChronWell do?
◘  How can patients and practices engage with ChronWell?
◘  “We can marry great people with great technology”
◘  Effect of COVID-19 on ChronWell’s business
◘  We can manage three birds with one stone – 1) stay connected with technology 2) manage chronic conditions and 3) recover lost revenue
◘  Will there be a decline in telemedicine?
◘  “This is a different world”
◘  “We see technology playing a bigger role, but a much quieter role”
◘  “Think of technology as an augmentor”
◘  Connecting the dots for GI
◘  In a technology-driven future, does the role of a gastroenterologist increase or decrease?
◘  Will doctors see patients differently in the future?
◘  People who want to be more efficient want to touch lives – from one-to-many
◘  “You have to think beyond the one-to-one intervention that is limited in the scope of time or place”
◘  “You have to live with the patient in their lives, not in your office”
◘  “Influence has to happen outside the boundaries of the office itself, outside time”
◘  How can GI practices use ChronWell?
“This goes way beyond those CPT codes”



The Transcribed Interview:
Praveen Suthrum: Joe Rubinsztain, CEO of ChronWell, thank you so much for joining me today on this conversation. I’m really looking forward to learning more about your company and how you got started. But first, I wanted to welcome you.
Dr. Joe Rubinsztain: Thank you Praveen, it’s a privilege to be here and I just love your work.
Praveen Suthrum: Thank you. Let’s start Joe, by finding out why you started ChronWell? What was the underlying idea? And what prompted you to start in this line of work?
Dr. Joe Rubinsztain: I was always passionate about computers and while I was going to medical school, we had created an early-stage Electronic Health Record. We brought that to the United States, created gMed and that became very successful. And we detected toward the end of it that the market was becoming saturated and heavily regulated. And innovation did not play such a central role anymore on the EMR. But there was a lot more to innovate beyond the EMR. Taking technology from being archival into actionable technology was critical for us. And so we figured that why not take the next step and create a new iteration of the technology that has measurable results and influences people to be at their best health.
Praveen Suthrum: What is this next iteration? What does ChronWell do?
Dr. Joe Rubinsztain: ChronWell keeps patients and doctors connected well beyond the office visit. It helps patients with chronic conditions stay at their best possible health in connection with their doctors. And it allows doctors to better play in the value-based ecosystem.
Praveen Suthrum: How does the patient engage and how does the practice engage?
Dr. Joe Rubinsztain: Imagine you have a patient that attends your medical practice and has IBD. And you’ve diagnosed that IBD and you now know that patient needs to take a special diet, needs a test regime, needs to have questions answered, you need to track their weight, and you need to make sure that you’re providing guidance for how to take the medications and things like that. So, as a doctor, you’ve issued a set of orders. We can understand those orders, we can prepare an intervention plan, we can marry great people with great technology to help the patient navigate the care for IBD. And we can connect with other players in the industry to make sure that they’re receiving the right diet such as Modify Health or to measure their vital signs with connected scales and other devices. And then keep the doctor informed with very little friction. So, imagine a patient has a care navigator or a concierge per se that is helping them navigate the condition, answer the questions, measuring the results, and that is constantly keeping the doctor apprised of everything that is going on but powered by technology to make sure that no stone is unturned and that every single detail is accounted for.
Praveen Suthrum: COVID would actually have accelerated a business model such as this did that happen in what way did it influence your business?
Dr. Joe Rubinsztain: COVID was a fast accelerator for us. Doctors were really concerned. They were no longer able to see patients. Some of the elective procedures couldn’t be performed anymore and telemedicine wasn’t enough. The practice wasn’t geared to allow that patient to establish that connection. Plus the doctors needed to reactivate the revenue stream and while they lost some of it, they discovered that Medicare had already approved a set of codes that allowed for them to take care of chronic patients. You could essentially manage three birds with one stone – you could stay connected using technology, you could manage chronic conditions, and at the same time, you could recover some of the lost revenue.
Praveen Suthrum: A lot of practices feel that COVID is going to now come and go and then in the post-COVID period we’re all going to revert back to an older form of care so, there’s going to be a decline in telemedicine. I’d wonder you know what you would say to something like that?
Dr. Joe Rubinsztain: The world has changed and in some areas, this has changed and become a little bit more divisive but in other areas, it has changed for good. Patients no longer fear interacting with doctors over remote platforms. Technology has already become our main lifeline of communication more than person to person. Social distancing is going to prevail until not only do we have a vaccine, but we have distributed that vaccine and we’ve developed herd immunity and who knows if we’re going to get another mutation. This is a different world and it has definitely changed.
Praveen Suthrum: Very interesting. Let’s fast forward the conversation to a point of time in the future. So, what role do you see technology playing in GI in healthcare and for a business like yours?
Dr. Joe Rubinsztain: We see technology playing a much bigger role but a much quieter role. Right now we as consumers are full of noise every day. We have social media platforms that push a lot of information to us a fraction of it could be useful a lot of it is ads. But what if you could have some technology that is really analyzing on the back end those things that matter to you and are able to generate an adequate intervention without getting too deep or disruptive into your life. For example, you already have smartphones and you do texting and doctors already have EMRs. Imagine if you had a very smart brain on the back end that is constantly churning information from previous claims or information from other EMRs, laboratory values, social media trends with permissions and within the boundaries of the law. Imagine that we now understand also the patient’s environments and social-economic factors and behavioral parameters. And you turn all that into an AI model or into a machine learning model that can come up with the right interventions for that patient in a personalized way.
So, personalized medicine is not just a genetic analysis it’s also a behavioral analysis. If you put all that together and if you have a very smart brain on the back end that is connected with people who are well trained and capable of empathizing with a patient, you can really deliver a great experience. It’s going to utilize some of the things that you already use such as texting and maybe social media and other communication channels to drive positive influence to help you become better. To help doctors consume a lot of information in very little time so that they can make the best decisions possible. Because those decisions were well-curated and summarized from multiple angles that only a machine can do. And so think of technology as an augmenter that is not constantly in your face but on the back end constantly analyzing and feeding you the relevant information that allows you as a doctor to be more effective, to be very efficient, and to not have to work too much and make those little changes in the patient that truly have a difference with respect to their outcomes and the cost of care.
Praveen Suthrum: I love your response on this. Help us understand from a gastroenterology standpoint if you can connect these dots for GI in particular. What does the future look like from you know this lens that you’re seeing?
Dr. Joe Rubinsztain: Imagine that you now have the ability to not only take information from a company like Echosens who is great at diagnosing the liver non-intrusively or non-invasively. And imagine that you can now compile also laboratory data, socio-economic data, and you then partner with a company like Modify Health to deliver a diet. And then you deliver an internet-connected scale that all feeds into a central database that analyzes trends, and analyzes the patients and suggests, for example, the message that is the most effective for this person to deliver. And instead of having that message at first being delivered by a human, you send a text.
Now you’re measuring how that patient actually took that info. And if that info didn’t nudge the scale, then you now have a person that picks up the phone, that has been very well trained, and has consumed very quickly the information necessary to help that patient nudge along. If that still doesn’t move the needle imagine now that we’ve generated a report for that patient automatically, that goes in, to the provider, who is very friendly with respect to the risk of that patient not following diets or potentially not moving in the right direction. So, that the doctor can make the right medical decisions and then we can go again through that cycle of the computer in the back end generating the interventional strategies, interpreting the data, and coming up with actionable items that are well distributed between the automatic side of the story, and the assistant side of the story, and the provider side of the story. And if you really know how to distribute those, you can make changes at a low cost that are going to have a big impact on the cost of care. So, that’s one example.
The example gets much more interesting when you’re going to IBD. IBD has a very complex outcomes framework. We’re working uh very hard into building a very intelligent outcomes framework in our platform that takes information from multiple sources. Not just from laboratories or EHRs but other data as well. That allows us to truly use for example machine learning to understand the difference in interventional patterns or the difference in behaviors that happen when you do an A/B test of two different types of approaches. And see if that patient actually had in the right direction or if you can use AI or you know neural network analysis to understand early trends for complications can you intervene sooner? That technology is only working transparently on the back end in only sending the signals that make sense and through channels you already know. So, you don’t have to download apps, you don’t have to install new systems, you can just come into the physician practice and with very little friction, you can tell them – “look, we’re going to work together. Give us a plan we’ll take it from there. We’ll consume it. We will send you regular reports into your EMR; you don’t even have to learn new technology. And MR. Patient, you don’t have to download our app. You’re welcome to. It’s great, it’s very useful but if you don’t want it, we’re capable of communicating with you through several channels.”
In the end, as you start looking deeper and deeper and deeper into all these chronic conditions and you start coming out with outcomes frameworks, interventional patterns, best practices, data-driven behavioral analysis, A/B tests, and machine learning that comes together into – “hey what do I need to tell this nurse to tell the patient in order to have the maximum possibility of them getting better?” That’s when it gets really interesting.
Praveen Suthrum: Excellent. So, in this world, Joe would the role of a gastroenterologist in these conditions, let’s take those two specific examples that you narrated, and it was fantastic to listen to you frame it the way you did. So, in that world would the role of a gastroenterologist increase or decrease?
Dr. Joe Rubinsztain: It increases. Look, we as physicians have been trained to care for patients. Along the way, we discovered that we needed to do a lot of regulatory work, and a lot of documentation work, and administrative work. And we needed to cater for the fee-for-service crowd, and we needed to spend less time with patients. And you know the practice of medicine quickly became the business of medicine. And a lot of people had that conflict of you know ‘What did I train for? To help or to or to be just a worker?’ Imagine if you very intelligently took a lot of that administrative work and regulatory compliance and put it into an automated process. And you could treat patients more with less time. You could make those interventional changes that make the biggest difference.
There are two things that could happen there – one is you can see more patients in less time because you had to use a lot less time interpreting information. You can look at it distilled. And the second thing that would happen is that you would have technology that augments you. That allows you to click a button and connect with a patient without really having to be synchronous. It can be asynchronous communications. Or you can have a well-trained nurse that really knows how to work together with you, who is certainly following your treatment patterns because technology understands your treatment patterns and she’s constantly monitored to make sure they comply with the treatment patterns that you’ve set. And you can take a look at everything that they’ve done.
Praveen Suthrum: You know when I interact with physicians and gastroenterologists in particular, and I take a step back and observe these interactions, a lot of the doctors are thinking – ‘If I become a technologist also or move a little bit into that world then I don’t touch lives one-on-one, I touch lives one-to-many.’ So, I’m just wondering is the healthcare world in transition? So, in the future would there be a hybrid model between private practice hospitals and a completely new world where doctors are seeing patients but just differently, not how they see today?
Dr. Joe Rubinsztain:  That’s a great question. Yes, there are some of us who like to touch more people with less effort and we’re focused on efficiency. But there are also people that thrive on connecting with others and helping others one-on-one. I don’t think there is one answer to that question. I think that people that want to be very efficient and build a great business, and a great practice can and they need technology to do that. But also there are people that want to connect with their patients and want to help them the most and want to prove that they’ve made a difference in their life and they also need to use technology there. So, either way, technology is going to help them achieve that goal. The interesting thing is that we’re going to be shifting from a fee-for-service to a value-based model who knows when but it’s certainly slowly moving in that direction. And in that case, you just don’t have a choice. You have to think beyond the one-on-one intervention that’s limited in the scope of time or place. You have to live with the patient in their lives, not in your office. Influence has to happen outside the boundaries of the office itself and outside the boundaries of time. And the only way to erase time is to automate the burden.
Praveen Suthrum: Brilliant. So, how exactly can GI practices use ChronWell today?
Dr. Joe Rubinsztain: You would contact us. You would contact our sales team. We would make a presentation for you. It’s funny because when we talk to a practice we basically tell them – “Look you need to do very little we’re going to be working with your EHR. So, it’s embedded in your workflow and then we tell them, and oh, by the way, we will collaborate with you on chronic care management and you don’t have to invest anything. We will come in and we will build this new revenue line with you and we will partner on it. And this initiative requires very little work and it requires no capital investment on your side.” And so it’s easy for them to come back, talk to our sales team, we go through the process. It’s much easier than selling an EHR for sure. And as they get deeper and deeper into the program they discover that it has many dimensions that they didn’t think of, and they start collaborating more and more in understanding a broader outcomes framework than just the interactivity perspective of it.
Praveen Suthrum: So, how do they get paid?
Dr. Joe Rubinsztain:  So, Medicare has already approved a set of CPT codes that are related to chronic care management, principal care management, and remote physiological monitoring. And some private payors are already joining in the fray. Essentially what happens is that we partner with the practices, once the patient is a good candidate for it, they notify us. We work with the patients to make sure that the program is a good match for them. And we report to the practice the activities that we’ve performed. The practice invoices the activities and pays a subcontractor fee for those services.
Praveen Suthrum: Was there anything else that you wish to share before we close?
Dr. Joe Rubinsztain: We need to start thinking differently about how we interact with patients. We know we’re busy as providers seeing, many patients over and over every day or doing many procedures over and over. It is true that some of these procedures are going to be disrupted with DNA technologies and the like. And the sources of revenue for the provider are going to change over time. In any iteration of that change, a deeper relationship with the patient is going to be critical. And a better relationship with the payor is going to be critical. And payors only want two things – They want to know you’ve delivered great care and that they didn’t pay too much for it, right? And patients only want to know of one thing that they trust you to make them better. The only way to do that is to truly be in touch with them. So, think of the experience beyond the fee-for-service and beyond your practice as a full experience, not a limited experience. This goes way beyond those CPT codes. And it goes into the new model of healthcare which is much more pervasive than an interaction that you get paid for.
Praveen Suthrum: Joe, thank you so much for sharing all your views. It was a very educational experience for me and I’m sure everybody who’s watching this will feel the same.
Dr. Joe Rubinsztain: Thank you, Praveen. It was my privilege. Your questions were great and I’m glad to be working again with the GI community. It’s a privilege.
Praveen Suthrum: Thank you.



By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
22 Sep 2020

Interview with Dr. John Allen (Michigan): “[Expect] pretty stiff headwinds for many years to come”

John Allen, M.D is the Chief Clinical Officer of the University of Michigan Medical Group and is also on the board of Allina Health. In 2019, AGA presented its highest honor, the Julius Friedenwald Medal for his contributions to gastroenterology. Previously, he was the chief of Digestive Diseases at Yale and helped build Minnesota Gastroenterology (now MNGI), one of the largest GI practices in the country.
This interview is so insightful that it’ll help you make several business and personal decisions for the long haul. Here’s specifically what you’ll take away:
1)  What does it take to lead calmly and steadily through a crisis? Especially a large health system like Michigan
2)  Planning for another pandemic (or another wave) should it occur
3)  Fundamental shifts in GI and US healthcare economics that we are not yet recognizing
4)  Weighing pros and cons of private equity
5)  Future of gastroenterology – technology, consolidation, ethics and morals
Watch this thought-provoking interview (45+min).
Do not miss this one – watch it end to end.
◘  Dr. Allen’s professional journey so far
◘  The complexity of handling COVID in a large health system: “It was brutal”
◘ “We were mandated to reduce costs by $400M (laying off over 500 people)”
◘  As a leader, how to navigate emotions and views calmly?
“This is a time to come together and show the most empathy we can”
“This is the chronic phase. We’ll have to adapt our care to exist with this monster virus”
◘  Are you planning for another pandemic?
◘  How do you disseminate learnings from the large system level to smaller practices?
“When you have high fixed costs, it’s like 80% of your home mortgaged”
“We are going to see Medicaid enrollees go up from 70 million to 80 million”
◘  “At Michigan, every 1% switch from commercial to government payors is $8 million less in revenue for the same service. Multiply that with what’s coming up with the payor-mix shift.”
◘  “[Expect] pretty stiff headwinds for many years to come”
◘  What’s the future of gastroenterology?
◘  Risks of private equity
◘  How do you put checks and balances in a way that doesn’t hurt patient care?
“Academic centers that don’t morph into a true integrated healthcare systems are going to have a tough time”
◘  “You aren’t going to be able to fight Humanas, CVSes, Aetnas, Optums in primary care”
◘  How do you re-imagine healthcare truly into a force for good? (“inequities are intolerable, immoral, and unethical”)
◘  The future of GI has to reflect that (“We have to re-establish our credentials as physicians”)
◘  “At some point, we have to level the playing field. We have an obligation to take care of people”
“It’s a time of reflection, a pandemic that hits like this really brings out how weak our safety net in this country was. A lot of people are interested in changing that”


The Transcribed Interview:
Praveen Suthrum: Dr. John Allen, I welcome you to our conversation. Thank you so much for joining me today.
Dr. John Allen: Well, thank you very much. I appreciate it.
Praveen Suthrum: So, I want to begin by asking you Dr. Allen, on what your role entails in a large system as Michigan Medicine?
Dr. John Allen: Let me give a little background on my journey first. I’m a trained gastroenterologist obviously and I think I’ve worked in almost every practice setting there is from the VA to a hospital setting to a small practice to a mega practice which was Minnesota Gastroenterology and now to academic healthcare systems first at Yale as Clinical Chief there and now at Michigan first as Clinical Chief of gastroenterology and now as Chief Clinical Officer and I also sit on the board of directors and chair the quality and population health committee for Allina Health which is a large integrated healthcare system in Minnesota. I’ve gained a lot of perspective on academics non-academics and other aspects of GI practice which has been really quite interesting. And so now I go back and forth between Michigan and Allina and can compare a non-academic, consumer-oriented healthcare system with an academic system like Michigan. It’s fascinating.
What I actually do at Michigan. So, I’m the Chief Clinical Officer of the University of Michigan medical group. And so that entails all of the faculty and all of the professionals that basically bill. All of those revenues come up through the UMMG – the medical group. We also manage the facilities for all ambulatory services. We have 40 different clinical sites. We have radiology, pathology, laboratory services, outpatient ORs. We have about 23 ambulatory ORs and an equal number of ambulatory endoscopy centers. And all those roll up to the executive leadership, which is the person I report to Dr. Mulholland who was the ex-chief of surgery and he’s the executive director and I’m the Chief Clinical Officer. I work directly with the Chief Operating Officer and Chief Nursing Officer. So, we basically manage the operations of the ambulatory part of Michigan. What’s interesting is that Michigan Medicine and Allina Health are about the same size. About 4.3 to 4.4 billion dollars in annual revenue. And so, again it’s really quite interesting to go back and forth between those two systems.
Praveen Suthrum: So, on a day-to-day basis what does your role look like is it more clinical, or is it more on the business side of medicine?
Dr. John Allen: No it’s completely administration now. I stopped scoping last September, a year ago, and have been staffing fellows clinics and things like that. But it’s really completely administration. So, I’ve switched into the administrative role completely. And on a day-to-day basis like for example this week we’re figuring out where, how often, and how to give flu vaccines to the 230,000 patients that are within our primary care catchment. And how to deliver those, and safely within COVID and social distancing and things like that. So, the operations of the clinics are our main focus. And I directly oversee 22 physician leaders and then they oversee another probably 60 physician leaders paired with administrative and nursing leaders as well. So, it’s basically that type of day-to-day activity.
Praveen Suthrum: Which world is more fun? The clinical side or the administrative side of medicine?
Dr. John Allen: They’re both fun. I practiced for 40 years and at that point, I felt I had completed that phase of my life and I was fine getting out of direct clinical care. When I was 50 actually I went back and got my MBA. Got into the business side of medicine and health economics and payors and negotiation and organization. And I find that just fascinating and in some ways, you can really make an impact on many people. When you’re providing clinical care it’s really one on one whereas if you’re really doing an administration coming from a patient-centric viewpoint you can really make a difference in terms of how we deliver care in a lot of people’s lives.
Praveen Suthrum:  Was that transition easy for you moving over from the clinical side to the administrative side?
Dr. John Allen: Well it was slow and iterative. It was not sudden. I started out at Minnesota Gastroenterology in the mid-90s and got into a leadership position there in the late 90s and began to take on more of an administrative role and it was a learning process. This is not easy and it’s not something you can learn from a book. It’s learning by experience and sitting through innumerable meetings and having to deal with all the different aspects of practice, in different practice settings. So, it’s a slow process. But, you know, I’m now toward the end of my career and you know I’ve gained a lot of knowledge there and so it’s a lot easier to make those kinds of system connections and I find that very interesting. So, it was a long process, a long learning process basically.
Praveen Suthrum: Even though we are several months into COVID now you know, I want to revisit the complexity of handling COVID you know in a system like Michigan. There were several months that you spent in handling it doing different things as its leader. So, I want to ask you how was it? How did you go about you and your team how did you go about handling the situation you know in the health system?
Dr. John Allen: Well, I mean frankly it was brutal. It’s brutal for the entire world it’s brutal for Americans and it’s brutal for healthcare workers. As you know January 20th was the first diagnosis of COVID in the United States in Seattle. In early March basically, we began to shut down elected procedures. And so, we had to shut down an ambulatory operation that sees two and a half million people a year (visits a year) within literally 72 to 96 hours. So, we had to consolidate clinics, we had to figure out what patients could have deferred care, what patients needed to come in still for an emergency, how to handle them. Everybody was short of personal protective equipment. So, it was a disaster frankly for a while. But the way we handled it in Michigan was very rapidly ramp up our infrastructure which had been there before. So, we have tiered huddles that started the unit and go all the way up to the health system in the first two hours of every day. So, we developed a command center that handled every aspect of the healthcare system. Met twice a day with the top-most leaders and the frontline workers as well. And really managed it that way in terms of communication.
We instantly converted many of the rooms in the hospital into a respiratory isolation floor with negative pressure. We got to the point where we could turn a hospital room into a negative pressure room in four hours. And we expanded in anticipation of hospitalizations, intensive care units, ventilators, and ECMO. So, we had to create an admitting officer the day that had complete control over transfers, and admissions. He was a transplant surgeon who was just superb. We identified two ex-military physicians to develop plans for a field hospital. So, we were ready to open up a 500-bed field hospital in the Michigan indoor tennis courts basically. So, we had all of these things and it really showed just the phenomenal preparation for the unknown that we had here. And I’m sure other systems had the same thing. But it was just incredible, the infrastructure that we could and the expertise that we could rely on to ramp up that quickly.
So, we basically ramped down and over the first three and a half months we obviously closed down elective procedures and ended up going from a projected operating margin of 175 million dollars per year to a little bit over 300 million dollar loss just in that period of time. And interestingly, the ramping back up has been even more difficult with the unknowns that we’re dealing with, and with all the different clinical service lines that had to go from a consolidated delivery to expanded delivery.
So, it’s just been really challenging. The second or third week of the ramp down the regents of the university and the financial people at the university level basically mandated that we reduce costs on a long-term basis by 400 million dollars. Reflecting an anticipated 300 million dollar loss plus the 100 million dollars that we send to the medical school each year we had to buffer that. Reduction in overhead basically. Which of course means personnel. So, we had to go through a very complex system of reduction in force and ended up laying off over 500 people in selected areas much less in direct patient care and more in support and administration. That on top of the COVID itself and what we’re having to do in terms of our own family was just emotionally brutal.
Praveen Suthrum: A large system like Michigan is like a mini-country. Wide variety of opinions, a lot of diversity, and many emotions that you have to navigate. Not just yours or your immediate team, but of staff, of patients at different levels. How did you go about handling all that as a leader?
Dr. John Allen: Well as a leader you don’t do it by yourself obviously. You have a lot of people around. Before 2019 we did not have the structured leadership, the infrastructure that we have now. It was very thin. So, Dr. Mulholland and I and our administrative and nursing partners have basically hired an infrastructure for leadership, tiered leadership over the last year and a half and that had nothing to do with COVID but had we not had that it would have been a disaster. So, from our standpoint as the top leadership, we have to convey a sense of calm and planning to that next layer of leadership. And also teach them how to convey that to the next layer of leadership down and then the frontline staff. But the anxiety about catching COVID, the anxiety about what to do with family, and now with schools being virtual and how do you handle home-care has been very tough.
But as a leader you just you have to not react. You have to not react from an emotional standpoint and really try to empathize and understand what other people are going through when you get those brutal emails in the middle of the night, and you basically have to learn to live with that, step back, take a couple of deep breaths, and then engage them as best you can.
We’ve been going around to the departments and answering questions from faculty, and then from staff that are you know, really quite angry and upset. Sometimes there are no answers. I mean we’re having a terrible problem hiring at the medical assistant level or the call center level for a lot of different reasons, it’s a low-paying job, and it’s very difficult to hire. So, our call centers right now are really in difficult shape. And we get emails daily about you know what are you doing about this and you just really have to present the calmest face that you can and keep trying to think through this and anticipate what’s needed.
Praveen Suthrum: At an individual level what steps do you take on a daily basis or what your routine looks like that helps you present yourself calmly as a leader to your staff and patients and the wider community?
Dr. John Allen:  Well, you have to realize that you’re on 24/7. You just cannot let down. So, the first thing is those of us in administration or in non-clinical areas, the President of the university basically said do not come on campus and don’t come on campus until the end of the year. So, I’m actually in Minnesota and I’m managing Michigan. Minnesota is my home I’ve been commuting back and forth for many years, but you know I came home to Minnesota and it’s basically eight-plus hours of zoom conferencing and managing. But it’s really a day-to-day interaction, making sure that you’re touching base with the correct people, reassuring them that they have your back or you have their back, and going on like that. So, it’s completely changed how we manage them. Most of the top leaders that again don’t have day-to-day staff interactions or face-to-face interactions are working remotely and that’s really changed things a lot. We expect to continue that well into the first quarter of the next year.
From myself personally, daily exercise, making sure I get some sleep, taking care of myself and family my kids are grown so, it’s my wife and our three dogs. Basically, you know focusing on what we need is a foundation and then again being able to project that to other people and trying to help them. This is a time when we have to come together and show the most empathy we can and a giving spirit and the more you can do that, really the better it feels internally.
Praveen Suthrum: Thank you for sharing that. I want to go back to a point that you made earlier about last week or this week you know where you are discussing internally about how do you administer 200,000 plus flu vaccines across the board in the system. I’m interested to know what kind of tools do you use? How do you go about making these decisions? How do you ensure that it gets done? What kind of a rhythm or project planning do you have in place that you see it rolls out in the coming weeks and months?
Dr. John Allen: We have a really incredible Chief Operating Officer and Chief Nursing Officer. We have project managers assigned specifically to this. Flu is very interesting. We manage the same problems every year. If you look at flu vaccinations from a straight revenue standpoint it’s really a money-losing operation. We get about three dollars in net revenue for administering a flu vaccine but that doesn’t really count all the back stuff that you have to do to prepare it. So, it’s really you know not something that you make revenue off of. However, it is an incredible emotional tie for primary care and their patients they really want to provide this to their patients. So, we have tried to say you know utilize Walgreens, CVS, and retail pharmacies to administer flu. And we have gotten pushback – they don’t administer flu for kids under eight for example so our pediatricians absolutely insist on providing that. So, then what you say is how do you do that and socially distance.
You can’t have a lot of people coming in for just flu shots to our big clinics because that literally takes the place of somebody that’s coming in for you know, care of their diabetes or hypertension because of social distancing, because of PPE restrictions. So, then we’ve popped up tents which we of course did for COVID but you know come November or October that’s not a viable option in Michigan. So, we’re now scrambling to find other areas where we can administer flu vaccines and testing in an indoor basis. And you’d be surprised at the pushback from a lot of landlords they simply don’t want that there. So, it’s been a real challenge we have people scanning the facilities that are available in our county and state to try to identify this. But it’s a process of identifying facilities, identifying staff, and identifying the cadence of bringing people in the midst of COVID that has been challenging but really incredibly interesting. And we will succeed that’s the other thing we will make it happen and I’m quite confident with that.
Praveen Suthrum: In which wave of COVID are we in? You know are we still in the first wave? Have we rolled into the second or you know is this an ongoing thing? The reason I’m asking is how do you account for it internally, when you have internal planning meetings saying are you expecting things to return? I’m curious to know about your planning process actually.
Dr. John Allen:  Sure yeah it’s really fascinating. Well first of all the wave that we’re in now whether it’s the first or second wave or whatever this is the chronic phase. This is the wave where we have to adapt our lives and adapt our care to exist with this monster virus for quite some time. Whether we get a vaccine in the next month or two, there won’t be mass vaccinations, and there won’t be enough immunity within the community to really dampen this down for a long time. I mean we’re really anticipating a year to 18 months. That being said when COVID first hit, nobody knew what to do. We didn’t quite know what personal protective equipment we needed, we didn’t have enough supplies, we didn’t really know about the aerosol transmission, and the importance of crowds and masking and all of that.
So, that initial wave hit us very hard. A lot of times it hit vulnerable people like nursing homes or people in some sort of community living. Those are vulnerable people with multiple co-morbidities and they got very sick. So, they had to be hospitalized, they had to have ICU beds, they had to have ventilators, a few had to have ECMO. And the death rate was just incredible. Now the increase in COVID is in people that don’t necessarily need those you know end-stage resources. It’s more in young people who don’t get quite as sick they obviously do get sick but the demand for beds, ICUs, and ventilators is not as much.
That being said we’ve got a four-tier program depending on the wave of COVID. You get about a two-week notice when COVID infection starts and when the need for hospitalizations occur. So, we are ready at a moment’s notice to reconvert rooms that we sent back to general medicine and surgery. We have everything ready depending on what COVID is in the community. We can predict incredibly accurately how many beds are needed what ICU beds are needed. So, we’re ready for that. And it turns out that there’s a big difference between summer and winter because negative pressure rooms require incredible demand on your HVAC system. So, in summer where you’re running air conditioning and you add negative pressure rooms, you are limited with the number that you can do because of your HVAC requirements. In winter that’s a little bit different. So, we actually have seasonally targeted plans for expansion to 15 beds to 30 beds to 60 beds. And of course, we always have the field hospital in our back pocket. I don’t see that happening. And in fact, we’re learning to live with this, and we do not anticipate ramping down ambulatory care at all. No matter what happens in the community. And I think we’ll see isolated hot spots that come up you know, around parties, or sororities or things like that but I don’t think we’re going to see the mass that we did originally frankly. But we’re not going to ramp down ambulatory short of an executive order from the governor.
Praveen Suthrum: In your internal discussions are you planning for another pandemic? You know not COVID but in the future, in case something else strikes?
Dr. John Allen:  Some of it depends on the infection routes for example Ebola is quite different from an aerosolized route like Influenza and COVID. But we went through Ebola planning and we did all the things necessary in case Ebola hit. We went through for MERS and SARS and things like that. And obviously, we did this through COVID. We’ve documented everything, we have a very specific playbook that we could activate really on a dime. So, whatever hits and whatever in infection source that pandemic rests on, we would be ready for it because we’ve done this kind of planning.
Praveen Suthrum: Now you’ve held, and continued to hold leadership roles in societies and which are at the national level. What kind of learning can you take from what you already do at the large health systems and enable that and what kind of learning can be disseminated to the smaller practices you know that are spread across the country who may not have the kind of resources that you may have at Michigan?
Dr. John Allen:  It’s a really interesting question and it particularly hits gastroenterology and some it relates to the history of gastroenterology. Traditionally in the late 70s and early 80s, you had small practices or solo practices where a gastroenterologist would have a clinic and then go to the hospital to use their equipment to scope. So, those practices had a very low fixed overhead, right? They’re asset-based, that they needed to support was relatively small. In the mid-early 80s, leaders like Gene Overholt and Cecil Chally, and Mike Weinstein realized that we could develop ambulatory endoscopy centers. Then it became infusion centers, and anesthesia, and radiology. And we were able to do that to provide a much better patient experience, much cheaper. But the downside of that is it put a tremendously high fixed cost within practices. Obviously, you know this you’re a Ross School of Business graduate. So, when you have those high fixed costs it’s like having a mortgage, where 80 percent of your home is mortgaged. If you have a down-turning monthly cash flow it can be annihilating and that’s what’s happened during COVID.
Practices depend on monthly cash flow from colonoscopy and seeing patients and when that’s cut off, you have to turn around and say ‘where’s my capital coming from?’ and there are only a limited number of capital sources – you can borrow from the bank, you can connect with a health system that has deep pockets, you can connect with a private equity group, or you can connect with a strategic partner like Physicians Endoscopy for example or Optum. You need somebody that can carry cash year to year which practices don’t do because of tax consequences. So, practices now are in the position where their cash flow is devastated and they need capital infusion. And so we’re seeing a tremendous shift in practices with consolidation, with sales to private equity, with sales to health systems all you know all based on the fact that the monthly cash flow due to COVID has stopped and the fact that the median age of gastroenterologists like a lot of other specialists is pretty high, it’s in the high 50s. So, there are a lot of people that are approaching retirement and saying “I’m out this is too much.” So, those things are going to really change the face of GI coming up.
And that’s not even thinking about the economic impact on the United States. We’re going to see Medicaid rolls go from about 70 million to over 80 million which is going to stress state budgets like we have not seen ever. We’re going to have a lot of people out of work and of course, half the country gets insurance by their employer. So, even if the economy recovers fairly well on a day-to-day basis or the equity markets recover that infrastructure is going to drive patients into either government payors or being uninsured. And that for a health system or practice is a real problem that we’re not going to see resolution for two or three years. At Michigan, every one percent switch from commercial to government payors is eight million dollars less in revenue for doing the same service. So, you multiply that times what’s coming up in terms of the payor mix shift that’s going to be really difficult to handle frankly.
Praveen Suthrum: Yeah it’s going to be a very complicated and interesting problem to solve. You know one thing that I wonder about you know, the big entities and the small entities not just in medicine but you know, we saw through COVID that large companies which we would have never thought you know would file for Chapter 11 file like Hertz or J. C. Penney or and there was an ophthalmology private equity platform that also filed for Chapter 11. So, there must be some determining factor here that might drive this. Though, I agree with what you’re saying that the smaller practices for them to handle the impact is more difficult than for larger entities which may have a cash position like you know they may have money in the bank more than smaller practices do. But I’m wondering if you know even a large entity is safe anymore and I’m talking purely from an economic standpoint.
Dr. John Allen: I don’t think it is without changing their business practice and I’m particularly worried about academic centers that have very high fixed overhead and are much less efficient than non-academic health systems for example. It is very difficult to turn the ship in a big academic center like this. You know, typically health systems carry anywhere from 230 to 290 days cash on hand that’s their bank account, right? Well, that has really diminished. If you look at the annual revenue for an organization like ours it’s about 11 million dollars so everyday cash on hand times 11 million dollars is what we have in the piggy bank.
And most of that is in liquid money but a lot of the endowments, a lot of the cash that we have, is in illiquid funds or it’s in dedicated funds for professorships or things like that. So, again from a cash flow problem, it becomes really acute. So, we’ve really had to scale back. We’ve canceled planned facility expansion of two very big multi-specialty clinics, we’ve delayed a planned new hospital build and those all have ramifications. We have you know, canceled the retirement match for all the clinical faculty for example. The leadership has taken pay cuts and I mean those are temporary things to help in cash flow but they’re not sustainable. And I still don’t think that we have fully appreciated the change in economics for the United States in healthcare because of things that I talked about a few moments ago so this is going to be pretty stiff headwinds for many years to come
Praveen Suthrum: So, that naturally takes us to my next question which is on the future of gastroenterology and healthcare in general actually. And I want to thank you first for giving a testimonial for my book Scope Forward which is on the future of GI. My question is you know what aspects of the book resonated you know, with you like what do you think is likely to happen and what then? And in your own view what is the future of gastroenterology?
Dr. John Allen: So, I appreciate both of your books actually and the Scope Forward book was very good and the things that resonated with me is your continued warning about being dependent on a single service line which is screening colonoscopy and surveillance colonoscopy. And you know we’re seeing the results of that in COVID as well, right? You perceived very well the increased dependence on technology at many levels. Whether it’s remote patient monitoring, artificial intelligence, and screening colonoscopy, all the different types of programs like SonarMD to monitor inflammatory bowel disease patients. There will be more and more of that. And we’re going to separate and I think you were right on that. And the danger of that is that those all cost practices. And the ability to handle what’s going to become routine gastroenterology or cardiology or neurology care it’s going to be more and more expensive and regulations as well.
Those expenses have reached a point in a small practice or medium-sized practices for sure that are really tough. If you’re a very small practice in a rural community, for example, I actually think you’re in pretty good shape because your overhead is low and you have a patient base that is dedicated to you and the ability to hand to deliver really high-quality GI care. I think we’ll continue with that model. We’re seeing consolidation and it’s sort of that middle spot where you have a mid-sized practice that is going to be really stressed to have the capital to handle these innovations. And I think you hit that really well in your book. You also have a lot of emphasis on private equity, both in your first book and some in this book as well. And I’d just like to speak a moment if you wouldn’t mind about some of the risks that I see in private equity.
The basic business model of private equity is to do a leveraged buyout where you basically accumulate whatever you’re accumulating, whether it’s a manufacturing plant or a practice. Strip out costs as best you can consolidate to achieve some sort of economies of scale but you have to hit about a 20 percent annual return and correct me if I’m wrong but you know if you’re an investor in a private equity company you expect that it’s high risk but otherwise you just put your com your money in mutual funds. You expect that kind of annual return. And private equity goes in with the cash influx at first, which is good if you’re a more senior partner and you know are thinking about retiring in the next few years. But it’s really that second bite when the private equity sells to a bigger private equity where the second cash infusion comes in, where you get that much of a return. Because in between that you’re basically discounting your salary because you’re investing in the private equity whether it’s a management company or whatever it is. So, it’s a little bit tough, and private equity does not come in to really improve healthcare as their primary goal. You know, they are very much in it for profit.
A side effect can be better patient care, accumulation of big data, things like negotiating power. But I’m skeptical that this is going to really play out and maybe a repeat of the 1990s where you know we saw those kind of management companies come and then get really stressed in terms of assets down the road. That’s different than hooking up with a company whose business is delivering care and again I go back to Physicians Endoscopy and Capital Digestive as an example. That’s a long-term strategic play they’re not bound by a three to five-year window. So, I think practices have to be very careful about who they’re going to give their autonomy and particularly their financial autonomy to.
Praveen Suthrum: So, how does one balance whether at an individual level we agree or disagree with private equity but this is a wave and it seems to be happening. Regardless of what a practice might opine or feel, right? How do you make it better if it is going to happen anyways you know how do you put you know checks and balances in place in such a way that it doesn’t hurt patient care?
Dr. John Allen: I think there are ways. And first of all, as you know better than I there are probably 200 private equity companies that are targeting medical practices GI things like that and there are a lot of differences between those companies. If you have a company that’s going in with a really financial dent that’s just absolutely brutal I would be a little bit hesitant. But there are some really good private equity companies that are coming in and taking practices that have multiple EMRs for example and combining them into one and then planning to use those big data to give real patient outcomes. And you can almost accumulate enough patients to target a big payor and say “We will look at your patients and show that we can deliver better care.” When you go in with that dent whether it’s private equity or a strategic partner I think managing populations again whether it’s gastroenterology, or cardiology or what can improve care a lot. There are a lot of inefficiencies and those inefficiencies are going to be definitely stripped out.
Praveen Suthrum: What kind of advice do you have for an early stage gastroenterologist who might be watching this? How should they plan their career over the next five-ten years?
Dr. John Allen: Well, I think there’s a great opportunity I think you have to be very careful about where you end up being employed whether it’s a health system or a practice. It goes back to the very basics. If the primary purpose of that practice or health system is to deliver good patient care then that’s going to come out in your interviews, it’s going to come out and how the contracts are structured, it’s going to come out in talking with the partners of the health system. You’re going to be able to tell the difference between that and a practice or health system that is financially driven. Obviously, I would choose the former. I do think that the consolidation trend will definitely continue I think that going into a small practice right now except in some of those niche areas that I mentioned is very difficult and challenging. But you want a practice that is well run, that is patient-focused, and also is embracing the new technologies that we have – AI, remote patient monitoring, basically using technology to get rid of all of the routine stuff and strip out costs from what we do. Whether it’s colonoscopy preps delivered by bots or anything like that. You have to be thinking along those lines to really be successful.
I do think you have to have a more consolidated large practice whether it’s multi-state or single state depends on the region. You also have to have a capital partner and professional management that is really good and can anticipate changes. But I do see the practice of gastroenterology really consolidating like that. I think in the academic realm, it’s going to be very tough. And academic centers that don’t morph into a true integrated healthcare system are going to have a very tough time competing with the integrated healthcare systems that are out there. And there are some really good ones. You cannot live on high tertiary quaternary care alone you have to be able to deliver that secondary care and primary care. And then also, you know, offloading the most routine care. I think at the primary care level, a health system that can partner with some of the retail pharmacies or some of the, now technology companies that are coming into you know, the lowest level routine care. I think you’ve got to partner with them. We’re not going to be able to fight you know the Humanas, the CVSs the Aetnas the Optums in terms of routine primary care so let’s partner with them and use that as a win-win and really deliver the care that we need to.
Praveen Suthrum: My final question Dr. Allen, I want to go back to this whole COVID period right. Like so to a lot of people especially in healthcare it’s also been a time for reflection. And people have reflected on their own careers at an individual level but also overall at a larger healthcare industry or at a systemic level. Now if you go back to our healthcare system, whichever part of the world, to a pre-COVID world there’s been increasing patient and physician distrust like you know with each other, then there is this whole business of healthcare aspect. The fact that there have been several articles about the evils of the corporatization of medicine and so on. Now this reflective period of this lockdown, COVID, and everything else surrounding it presents also an opportunity to re-imagine a newer healthcare system you know, that’s more geared toward doing good and being really a force for good for patient care. So, I want to ask you if you were to reflect on something like that. What would a healthcare system look like in your view?
Dr. John Allen: Well, the first thing is we have to acknowledge that this is not only COVID but the racial and economic inequities in this country are I think, simply intolerable, immoral, and unethical. When George Floyd was murdered in Minneapolis I was sitting about nine miles from that corner. And what happened in Minneapolis and now is spread across the country, has demonstrated that we still have some really tough problems to solve. With COVID coming along no matter what your politics, all you have to do is look at the statistics of who is most affected by this and it is people that have that are suffering from health disparities. So, the future in terms of healthcare or gastroenterology really has to reflect that. We can’t be in this for profit. We have to re-establish our credentials as the physician who not only says “do no harm” but feels a responsibility for the individual patient for our community and for society at large. And I think that means moving toward an infrastructure where we have healthcare for everybody however that’s delivered remains to be seen.
But to have uninsured Americans or to have Americans that simply cannot access healthcare at a fundamental level again I just think is an immoral place for this country to be. And I think we have to step up with that and decide how we want to use our resources. It gets into the whole wealth redistribution it gets into the entire economy and tax situation but at some point, we have to level the playing field and I think we have an obligation to take care of people. So, we go on from this I think really reflecting on what our individual and what our society responsibilities are is going to be very important.
Praveen Suthrum: You know we know being inside the system that preventative care will probably result in fewer procedures but then the system gets compensated by more procedures because that’s what we’ve built so far. And we keep talking about you know value-based care, but you know the evolution of that is very slow in what whatever we can see. So, how does one balance that? Because if a hospital does not do procedures then it can’t survive at you know, at an economic level? But if it goes and invests in say getting people in shape for example, right like you know, reversing their conditions that’s probably the right thing to do because then they don’t end up you know needing the procedures but then if they end up doing who pays for that? And how does one balance in both these worlds?
Dr. John Allen: Well, you’re right we’re paid a lot for the complications that we cause. I mean that’s basically what you’re saying and for illness. I do see a movement. So, for example, a line of health just signed a six-year contract with Blue Cross Blue Shield of Minnesota that switches to a value-based system with a basically a ten percent, two-sided risk in terms of reimbursement. But coming with a partnership around the reduction in pre-authorization and administrative costs, and opening up of data systems. So, Michigan is doing a similar program not quite that robust with Blue Cross Blue Shield of Michigan. So, I think both the payors and health systems are realizing that we have to put real money on the table to partner and not be at odds with each other. So, I see that movement actually happening faster. And that will have some tremendous benefits. I think there’s going to have to be an investment in health disparities because that’s where a lot of these costs come from and that’s going to have to come at either a state or federal level. We have to admit that there is a role for both the state and federal governments in supporting those kinds of health disparities.
You’re talking really hard economics we can get into a discussion about wealth consolidation in this country and what it means, but I think this is a time of reflection and a pandemic that hits like this really brings out how weak our safety net in this country was. I think there are a lot of people that are interested in changing that. So, we’ll see what happens but I mean there is no way I mean, I remember hearing Uwe Reinhardt many years ago saying, “Look however it works people that are earning more than 75,000 dollars have to shift some of their wealth to those that are earning less than 75,000 dollars to provide healthcare there’s just no other way to do it.” There are some hard questions that we have simply kicked down the road that I don’t think we can do that anymore. I know that’s not a great answer to your question but it’s you know it’s the best that I can do.
Praveen Suthrum: I don’t think I was even looking for an answer because there is really no straight answer here. Just a reflection which I was seeking and you know which you gave and I really appreciate that. Dr. Allen, thank you so much for sharing all your perspective. It was very insightful. And yeah thank you also for being so candid with everything. I really appreciate that. Was there anything else that you wish to share before we close?
Dr. John Allen: No I don’t think so I think these forums that you put together are really interesting and keep doing them basically. I really appreciate the opportunity to talk with you and to reflect on this and to really think about the future.
Praveen Suthrum: Thank you.

By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
11 Sep 2020

Interview with Dr. Fourment, CEO of Precision Research: “Clinical research will be very different in five years”

Christopher Fourment, M.D is the President and CEO of Clinical Research Strategy Group and Precision Research (Texas).
In this interview, you’ll learn why Dr. Fourment chose to focus on clinical research as a career path. Dr. Fourment also walks us through the various aspects involved in clinical research and how CRSG and Precision Research are helping GI physicians build a sustainable ancillary for their practice. He also reflects on the role of the future of clinical research in a digital world.
Watch this insightful interview in full to learn what it takes to create a clinical trials ancillary in gastroenterology (14+min). 
◘  The difference between CRSG and Precision Research
◘ “We do a lot of the heavy-lifting which allows the sites to do what they do best”
◘  How and why Dr. Fourment built a career focused on research
◘  “Doing research as an ancillary helps everyone”
◘  “…an average patient visit generating $1,700 to $1,800 per visit”
◘  Profitability in clinical research
◘  Steps practices can take to engage with CRSG and Precision Research
◘  Playing the role of a co-director
◘ “The end goal is that I want to build research in their practice that is sustainable for them (the practice)”
◘  What GI research is getting sponsored right now
◘  “The research landscape in five years is going to be very different”

The Transcribed Interview:
Praveen Suthrum: Dr. Chris Fourment, thank you so much for joining me in today for this conversation on clinical research. You are the President and CEO of Clinical Research Strategy Group as well as Precision Research. So glad that we’re speaking finally and happy to get started.
Dr. Chris Fourment: Thanks for having me on, Praveen.
Praveen Suthrum: I wanted to start by asking you that what is the difference between the two companies that you run, CRSG and Precision Research?
Dr. Chris Fourment: It’s kind of how they conduct business is the main difference. So, for Clinical Research Strategy Group, the customers for CRSG are – one site that really wants to build research but doesn’t know how to get started. Doesn’t want to take the time to build or to figure out how to build infrastructure. The second customer for CRSG is the site that is already built and already running research but maybe wants to take it to the next level whether it’s just increasing profitability, increasing the geographic size, and scalability. But the key with that group is to really provide to groups that want to do good research the tools to build the infrastructure and allow them to be sustainable long-term on their own.
With Precision research, it is called a Centrally Integrated Research Network or CIRN and what this is… it is a network of really good GI clinical research sites around the country, who have shown a lot of performance in the past, who already do good research, and what Precision does is… it contracts with pharmaceutical companies to bring studies and once we bring the study to the research network, then we handle a lot of the pain points for the sites. We handle a lot of things like the startup, we handle the contracting, and all the budgeting, the regulatory for instance is all done for them. We build out the source documentation we build out the study in the CTMS – Clinical Trials Management System. So, we do a lot of the heavy-lifting, which allows the sites that are part of Precision to do what they do the best… which is to identify patients for trials, and get them in and see the patients.
Praveen Suthrum: How did you personally choose to focus on clinical research versus doing what everybody does – either going into private practice or academic medicine?
Dr. Chris Fourment: Yeah. Great question. So, after medical school, I got an offer from a pharmaceutical company to come into their medical affairs division. And I worked there for seven years in IBD at the pharmaceutical level as a medical science liaison and then a liaison between clinical operations and medical affairs. One of the things that it allowed me to do is see a bunch of clinical research happening across the country. And I saw sites both academic and community practice and worked with those sites in clinical trials. And what I noticed was there were a lot of sites that were probably destined for failure in the next five years. In other words, the burden of doing research at their site was becoming so much that they weren’t going to be able to kind of keep it going. And because of the burden and because of the pull of their regular practice, the doctors were probably at some point going to have to make a choice and decide whether or not they wanted to devote more time to this research effort. Or whether they just wanted to continue their practice.
I then went to work for TDDC in the GI Alliance and worked with a great partner, Dr. Tim Ritter over there. Where we for five years, built that program to one of the premier clinical research programs in the US. And after that, I really decided to continue to do what I think I love doing which is helping sites become really good. Whether or not it is going to be a true ancillary for the practice or whether they just want to improve the clinical resource or be able to offer clinical research to patients.
Praveen Suthrum: Why should GI practices consider research as an ancillary?
Dr. Chris Fourment: Reasons to… I think to do research as an ancillary or to create an ancillary out of it is that it helps everyone. You look at it from the patient’s standpoint, the patients have access to those therapeutic advancements that most won’t have access to for the next 10 years and they have access to them today through clinical research. So, it is a great way to bring those things to the patient sooner. It is a great way to be able to see the patient more. You take IBD as an example; I think all of us believe that in the ideal world we would be able to see our patients sooner than let’s say six months for a visit. And with clinical research, you are able to do that. You are able to see your patience on a graduated scale to make sure that their disease is being aided by the approach that you’re using.
To the practice, to our point, it can certainly be an ancillary. We look at these research visits, and I think ideal to me in my mind is an average patient visit in research generating around $1700 to $1800 per visit. And a coordinator… when I look at how many visits a coordinator ought to have over the course of a month generally speaking what rate looks like to me is somewhere between 20 to 30. So, if you multiply, let’s say 20 visits by about $1800 per visit you can see that if you have the patients in your practice, and you bring research into the practice, it doesn’t take long to really grow into a point where it can become a good ancillary.
So, that’s the direct value for the practice. The indirect value is that not every practice has research going on. And so the way you’re viewed in the community if you have a research program going on at your clinic may be much different than the gastroenterology practice down the street and that could impact things like referrals. As you get referrals from the primary care. That could impact the way the patients sort of view your practice (if you have research). And then the last part is profit. So, if it helps the patient, if it helps the practice, does it help the bottom line? And you know the way that research runs in a lot of cases in practice is it is kind of a break-even type of prospect. But there’s a way to… And a method to really make research become profitable. So, if you like the first two pieces, if you believe that it helps the patient, if you believe that it helps both, directly and indirectly, the practice, there is a way to get profitability.
Praveen Suthrum:  Now, when a practice decides to engage you or work with you, what are the exact steps that they can take?
Dr. Chris Fourment: Well, it depends. In Clinical Research Strategy Group, I mean the best thing to do is reach out. And then, what Clinical Research Strategy Group will do is take a look at where the research is currently in the practice. So, in other words, do they already have a foundation for research? Or are we building a research from scratch? And either one is okay but there are different strategies that go into both of those. One of the things that we rely on heavily is a Clinical Trials Management System. It is sort of like an EMR for research and it allows a lot of transparency into the program. It also allows us to draw metrics on the program.
The other things that we do to get started are – we create as SOPs – standard operating procedures that represent what our sponsors want to see out of the research, and what the FDA wants to see out of the research. We create a corrective and preventative action plan or a CAPA plan. A CAPA plan is what we use when something goes wrong in research and we have a protocol deviation to make sure it doesn’t happen again. The other thing we do is start to establish a budget for the sites based on upon the actual value of the time that they will spend in studies. And we put together the justification letter so that when the sponsor comes back, and says “Well we can’t really give you X number for this particular procedure” you say, “Hey look that’s my policy here at the site.”
With Precision, again we’re looking for sites that already have good research programs going on; they are already doing fantastic research. And what they can do is getting contact, if they have it already and we can look at sort of what that model would look like for them. And the types of studies and studies that we have to offer, that we could bring in, with full Precision services. And we do that at no charge with Precision. So, the sponsor pays us. The site does not. But again, they need to have the CTMS system in place. That is the most important piece because that allows us in the Precision model to be able to build the regulatory file for them, and manage that regulatory file. It allows us to build the source documentation so that they don’t have to (that’s about a 10-hour job for a coordinator). It allows us to build the study into the CTMS system properly to make sure that they are able to run the reports and go through the financial aspects that they need.
Praveen Suthrum: What is your business model in both these companies? How do they pay you? Like, the way you have narrated CRSG seems to be more of a consulting angle, and Precision maybe a little bit different. If you can clarify that, I think it will be helpful for practices to know.
Dr. Chris Fourment: You’re exactly right. So, CRSG is more of a consulting model. The role that we play at the site is more of a co-directorship, right? So, we really partner with that site. And I’m on calls multiple times a week with each of the sites that we work with to make sure that things are going in the right direction. Once you are in the Precision network, short of the cost of the CTMS system, which is nominal…, it is a few $100 a month or something. So, that is the only cost to the site.
Praveen Suthrum: What kind of a budget should they outline? And when they work with you, does it involve costs associated with building a site, if they don’t have one because it requires space.
Dr. Chris Fourment: It’s a great question. So, there is a cost involved obviously, as with any other ancillary. If you build an infusion center, you are going to have to buy infusion pumps, you’re going to have to buy chairs, and you’re going to have to do all that. So, the equipment cost…  what you need to do research – refrigerators, freezers, the centrifuge, things like that. The cost for all those is around $15,000 per site. If you want to do multiple sites, it is going to be sort of amplified there. Again, the cost of the CTMS system is nominal. And it is important to do it individually. So, rather than having just… sort of one-size-fits-all program, we’re able to look at what the site’s needs are, and what the site’s desires are.
Praveen Suthrum: So, I’m guessing it depends on contract to contract?
Dr. Chris Fourment:  Absolutely it does. But you know, the end result or the end goal is that I want to build research in their practice that is sustainable for them. There are a lot of other models and things like that… that would build research in the practice and continue to take it and give the practice a little bit. I want to be able to have this be a sustainable ancillary for the practice.
Praveen Suthrum: What kind of research in GI is going on with the sponsors that you are connected with?
Dr. Chris Fourment: So, there’s a lot of IBD research. Crohn’s and Ulcerative colitis in both phase two and phase three. Phase two is the shorter-term studies and phase three are the longer-term studies. There’s also work on the luminal side in Eosinophilic esophagitis (EoE) and celiac disease and many others. On the hepatology side, there are NASH trials. I think it is a great idea to sort of broaden out our scope and take on IBD studies and also NASH trials. There’s a lot of work going on in both of those spaces and should one sort of ebb and flow, the other one will perhaps be the opposite. In other words, if we cure Inflammatory Bowel Disease, which would be wonderful, then you still have a productive NASH program going on.
Praveen Suthrum: One final question Chris on technology and clinical research. There seems to be a big role for artificial intelligence and more advanced technology in clinical research. Could you share your thoughts on that?
Dr. Chris Fourment:  So, one of the things that COVID has taught us and it was actually a conversation going on prior to COVID was – could we sort of build virtual clinical research? So, could we reach more patients by having a virtual clinical research platform so that we can do informed consents online or via telemedicine, something like that? Could we conduct a visit virtually? So, that’s one side of that. A company that does a great job of that is Rx.Health, with the trial-engage platform they are working on exactly that. Another piece of that puzzle – How do we get patients for our studies easier? So, how do we identify those patients that already exist in our EMR system, without having to do it completely manually? And a company called DAYCAP is invested in that space and really working hard as is Rx.Health. So, I think there are a number of different options that if we look at the research landscape in five years, I think it’s going to be very different. I think all of the aspects of clinical research are not going to be held in a brick and mortar office, I think many of them will be done virtually.
Praveen Suthrum: Thank you very much for all the insights and perspectives. It’s definitely very educational for me and I’m sure it’ll be the same for everybody who’s watching it.
Dr. Chris Fourment:  It was a great discussion this morning. So, I appreciate you for having me on and I appreciate all that you’re doing.
Praveen Suthrum: Thank you so much.

By Praveen Suthrum, President & Co-Founder, NextServices. 

COVID-19: The Way Forward for Gastroenterology Practices
COVID-19 is a double whammy of both clinical and business disruption. This ebook will help you explore possible scenarios and be a guide in your plans for the future.
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