Part II: Q&A with Turntable Health Founder Zubin Damania
What happens when a Stanford University hospital doctor meets Zappos CEO Tony Hsieh? The result might look something like Zubin Damania’s Turntable Health, the Las Vegas-based primary care clinic that’s funded by Hsieh and is focused entirely on prevention.
The first part of this interview between Arnab Sarker (AS) and Zubin Damania (ZD) can be found here. Damania described the basis of his company and why he thinks it has the potential to go viral. In part two below, Damania goes on to explain certain obstacles medical startups face and why this is one of the most exciting times to be innovating in health care.
AS: As a medical student, I can see the frustration in my classmates’ faces when we talk about the healthcare system, and it has led to less interest in primary care. What are the obstacles for companies, like Turntable Health, who are really trying to rebuild from the ground up?
Zubin Damania: There are definitely a lot of obstacles, some very typical for disruptive businesses and some that are not. I think the biggest single challenge we’re having right now is getting sort of the word out. People feel like this is too good to be true, and they’re reluctant to try it out. The second (thing) that I think is a big challenge is scaling the culture. So once we do grow, finding those doctors and health coaches and nurses and social workers who have the right mindset to work in this kind of practice is still challenging because we don’t train our doctors this way. We train them in medical school to still be cowboys—autonomous creatures when (what) they really need to be able to do is work in these very tight teams. The final thing is, you’re asking employers and health plans to effectively double down on primary care. So, primary care typically costs about 4 percent of our total health care spent, (but) we’re asking for 8 to 10 percent. In return (with data of course) we can drop overall costs and, more importantly, improve outcomes. Now, Nevada Health Co-Op gets it, and they’re doing it. So you have to find these progressive, enlightened entities. Traditional payers like UnitedHealth are not going to understand that right now; they’re not incentivized that way. In fact, if their premiums go up, it’s all the better for them.
AS: The clause related to Direct Primary Care in the Affordable Care Act has been a great boon allowing patients to meet the mandatory insurance requirement by pairing direct primary care plans with low cost, high deductible insurance plans. Given how active the payer community is on Capitol Hill, do you worry about pushes to change the legislation?
ZD: My take on that is this: The old-school insurers will figure out soon enough that this is the way things are going. There are examples already, with healthcare conglomerates like DaVita developing direct primary care subsidiaries, like Paladina. I think people understand that this may be where it’s going, but just right this minute, it’s hard for them to wrap their heads around it. Their current business model doesn’t really support it. Over time, it will be less antagonistic and more, “Okay let’s figure out how we can work together and leverage this idea to improve care and make it more efficient.” So I’m less worried about that actually. Also right now, we’re barely a blip on the radar. Obviously if we were a lot bigger that may be more of a concern, but right now, large payers hardly even register that DPC exists.
AS: Tony Hsieh, CEO of Zappos, has been a big supporter of Turntable Health as part of the Downtown Las Vegas Project, and the city has also been very receptive. What was your value proposition to them as part of these urban revitalization projects?
ZD: I’ll tell you the city hasn’t invested in us at all. We are an entirely private entity, so had no pitch to them except that, “Hey, this is going to improve care, and it’s going to drive a creative class influx of young doctors who want to work here.” In a city that’s been characterized by relative fragmentation and lower quality, the selling point is simply to improve the quality of care for as many people as possible and bring in new jobs and a creative class of people to a place that hasn’t been known for that.
For Tony, the pitch was that we’re trying to transform the world by fixing health care, and our hypothesis is that if you fix primary care, by extension, you’ll fix the rest of health care. Everything else will ripple out and fall into place. It’ll take a little while to get there, but this is a play to do that. Our focus is on changing the culture of how we provide care – collaboration, focus around the patient, and also a supportive team that has each others’ backs – those sort of transformative ideas very much resonated with Tony so the value prop to Tony was pretty clear: fixed culture, fixed health care in a disruptive way, change the world and solve its incarnate trillion-dollar problem.
AS: So, we’re interested in helping startups figure out what the next “big thing” is going to be and how to execute in the space. Particularly in health care, having a great product is never enough. There needs to be a thorough understanding of the space. What advice would you give to someone who’s starting a health care company now?
ZD: I would say is that this is one of the most exciting times to be in healthcare because I think we’re at a tipping point. You couldn’t really say this in the ‘90s or most of the 2000s. I think ACA has pushed this issue into the forefront again and the whole medical space. I think the major players are terrified about what’s coming down the pipe. There’s so much uncertainty, and now is a great time if you’re doing something disruptive to come in and do it. Now what I would say is that if you’re a fledgling company, you need credibility and you need to have physician input or actual provider input. You have to solve an actual problem that is real. Not just something that you imagine is a problem but something that is an actual real problem. You need guidance and feedback from providers who have been in the trenches to keep you from drifting off course.
Once you’ve identified the problem, go somewhere where the system is as weak as it can be, so you can actually get some traction, build your brand and be disruptive. That’s why we chose Vegas, in part. Make sure you’re interacting with physicians and providers so that you know: 1) there’s credibility and 2) you’re getting the right input. Unfortunately, there’s no magic answer here.
Arnab Sarker is a healthcare consultant and medical/business student at the University of Virginia School of Medicine and Darden School of Business. He is the former Director of Operations of K Street Capital and regularly advises on issues related to health IT strategy and venture funding.