Episode 460

How Disruptors Can Scale to 99% of Americans: A Theory of Change for Healthcare with Rushika Fernandopulle, MD

Jan 9, 2025

41:04

Fitness & Exercise Health Equity Public Health Primary Care

Episode Description

Advanced primary care disruptors — Iora Health, Oak Street, ChenMed, One Medical — proved better outcomes at lower cost are possible. But even combined, they serve a low single-digit percentage of Americans. Dr. Rushika Fernandopulle, founder of Iora Health (sold to One Medical, then Amazon), argues the next challenge is getting the status quo — the hospitals and carriers caring for the other 99% — to adopt what the disruptors proved.

In this episode, Stacey Richter speaks with Dr. Rushika Fernandopulle, MD, founder of Iora Health, about his five-prong theory of change for transforming American healthcare at scale — and why it has to run through the existing delivery system to matter.

WHAT YOU'LL LEARN ✅ Why innovating the clinical model without first changing the payment model is a waste of time — and why providers should walk into carrier negotiations with their own contract, not the carrier's

✅ How the 60% threshold works: once 60% of a practice's patients are in value-based payment arrangements, it becomes financially viable to treat everyone that way — and why moving fast to that threshold beats a slow, incremental transition

✅ Why running fee-for-service and value-based care from the same clinical setting is an "unholy mess" — and how to build a separate care model with people who actually want to work that way

✅ How Iora Health reduced hospitalizations by 40% using team-based care — health coaches, integrated behavioral health, social workers, and embedded population health management — and why this model can't coexist with a fee-for-service mindset

✅ Why health systems have two and only two options as Optum, private equity, and payer-owned physician groups move into local markets: get into risk and capture the surplus themselves, or watch someone else do it and inherit a shrinking pie of uninsured patients

✅ Why long-term payer-provider partnerships — not annual re-bidding — are the only mechanism that can sustain this kind of transformation, and what a 10-year Humana contract taught Dr. Fernandopulle about collective action

WHY THIS MATTERS Disruptors like Iora showed it can be done — great care, great health outcomes, affordable cost. But the math is unforgiving: if you want to impact the care of 99% of Americans, you have to go through the status quo cohort of hospitals and carriers. As Dr. Fernandopulle put it, the current path is unsustainable — close to $5 trillion a year spent with embarrassing outcomes on life expectancy and maternal mortality. The only options are to design the transition well, in a controlled way, or wait for things to collapse.

=== LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP460

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06:39 How Dr. Rushika Fernandopulle found himself where he is now.

08:06 Dr. Fernandopulle's conversation with Kenny Cole, MD.

10:33 Why is it important to have new payment models?

12:21 EP453 with Claire Brockbank.

14:50 EP455 with Beau Raymond, MD.