Podcast interview with Evan Falchuk, President of Best Doctors (transcript)

This is a transcript of my podcast interview with Evan Falchuk.David Williams: This is David Williams co founder of MedPharma Partners and author of the Health Business Blog. I met recently with Evan Falchuk, President of Best Doctors, a company that provides clinical insights to patients who are facing uncertain diagnosis or treatment choices. Best Doctors sells its services as an employee benefit to companies in the US and around the world.When an employee or a dependent is diagnosed with a serious illness they can submit their case to Best Doctors. The company gathers their medical information and consults with its expert network of physicians to review the diagnosis and treatment options. In many cases, the patient receives a different diagnosis and treatment plan than what they started with.Evan thanks for being with me today.Evan Falchuk: Glad to be here.David: Evan, tell me about Best Doctors. What does the company do?Evan: Best Doctors is an employee benefit and it is used by people when they are sick with a serious illness. You call us, we help you take charge of your care and make sure you've got the right diagnosis and the right treatment.David: How is that different from a traditional second opinion service? It sounds like something that somebody might have access to in any case.Evan: The issue frequently in the cases that we see is a question of what is actually wrong with the patient. And the trouble with getting a second opinion --whether you are physically going to see a doctor or have your records reviewed-- is that you are dealing with sort of a binary question. "I'm told I've got cancer. They want to do this treatment. What do I do?" And the answer is going to be, "Well for that kind of cancer, this is an appropriate treatment."What we do is actually dig into the information and get at what is really going on. About one in five cases have the wrong diagnosis. So, answering the question of how you treat something that you don't have is really not all that helpful to the patient.And that is our focus. Let's find out what is really wrong and then figure out what the things to do should be.David: What sort of information do you need in order to be able to do that? And does that tend to be a back and forth if it looks like the diagnosis is incorrect?Evan: What we do is when the patient calls, they call and they talk to one of our nurses who takes a detailed history from the patient. And then, we start to collect all their medical information. So as much as we can get our hand on this, we are going to try to get. If it is a cancer case, we are going to get the pathology and have that re looked at. So, the goal is to comprehensively look at everything and then ask the right questions and consult with experts to give the answer.David: The name of your company, "Best Doctors" makes a fairly bold claim. So, who are these best doctors and how do you know they are the best? And how do you know that they are the best for that particular patient?Evan: The name is interesting from a consumer perspective because when people are sick they start to think, "What I want is the best." And so, it helps us in terms of getting people to call because our calls come voluntarily.We consult with these experts from our Best Doctors' database. We figure out the right question and then we find the right kind of expert. And we have been doing this for about 15 years now. We survey doctors, we ask them within each of the different specialty areas to tell us who do they most respect, who do they think are the best, who do they want to consult with if they have the kind of disease that they treat.And so we collect literally millions of votes and data points on these doctors and we aggregate them. We have a whole process for that. And the result is an incredible tool that allows us to very rapidly access the type of expertise that is needed for each case at the time of need.David: That sounds good. Certainly I hear patients think about when you are sick, you really want the best doctors. You certainly don't really want second best, or the average, or the below average or the good enough.There is another company I have heard called "Advanced Medical" that I think originated in Spain that does something similar. Are they similar? What might be different about you?Evan: Well, I know them from Spain because we have actually been doing business in Europe for almost 15 years. So I have seen them there and I know they have come here to the States. Without knowing specifically what they are trying to do here, in general, for those types of programs, you see a sort of panel of doctors, some of whom are usually quite good.But the issue in these cases is always what is actually wrong. There is no use in again, asking a question about a disease that the patient does not have. And the cases that for us are often the most powerful and striking are the ones where you see that happening.So, we had a case where a person who was told she had a brain tumor and came to us and said, "Is surgery the right treatment for my tumor?"And what we found out from doing our review was that she did not have a tumor, she had a chronic inflammatory disease and we needed to talk to an expert in that kind of disease.So the problem with going to a panel of doctors is you may be asking a question that is not relevant to the patient's case.David: You said that this was an extra employee benefit. But I have Blue Cross Blue Shield of Massachusetts, which is a pretty good plan, certainly fairly expensive. Would they cover the service if I said, "Hey I want Best Doctors to review my case" or how would it be handled?Evan: The way we sell is to the employers. So the employers are the ones who pay for our service. And we charge anywhere from about $2 $3 per employee per month. And that covers the employee and their family. And so it is independent of a health plan. And it is purely up to you the employee to use and it is independent of your coverage and everything else. And so it is seen as a true consumer benefit.David: And what sort of companies would typically be good clients when you think about your business development, your prospecting. What is the profile of a company?Evan: Very interesting, because it is actually across the board. Here in Massachusetts, for example, large high tech companies like EMC have had us for some time and with wonderful results.We also have groups like Stop & Shop, the supermarket chain. And other industries, like trucking: we have JB Hunt whose trucks you see all over the road. Pharma companies, too. Genzyme, here in Massachusetts, is a customer.So, it really covers the scope of any industry and what I find most interesting when you talk to employers is that they know of situations where they have had employees who have been sick and have wandered around the system unsure of what to do and they wish they could have helped.And when they hear about Best Doctors they say, "Boy, that really would have helped that employee" and it is often a very easy route to open up the doors. They say, "Hey, let us put this program in place."David: I sometimes call that "The Diagnostic Odyssey" which sounds like what you're describing. Are there particular segments of patients that are likely to benefit? It sounds like the companies are across the board but is there also a big variety in the kind of patients or medical issues?Evan: We do see a big variety. Cancer is probably the biggest diagnosis that people call us for. But, the lens through which I would look at what we're doing is uncertainty, patient uncertainty. What are the things that are going to make the person feel like they are not sure what to do?So, it's no surprise that cancer is big because it's a very scary diagnosis and there are a lot of alternatives. But, we see many surgical situations, chronic diseases, and things like that where the person says, “Gee, I'm just not sure what I'm supposed to do.”David: You're based here in Boston, but there are patients all over the world. Are you selling abroad? If so, how do those customers differ from ones in the U.S., if they do?Evan: We're in about 24 different countries around the world. Millions of people are covered outside of the United States. The patients are very similar. It's the same issues, regardless of what country you live in, or what health care system you live under. You feel uncertain when you're faced with a serious illness, and so, we market this in the same way in all the different places in which we operate.David: You've been in business for many years, and certainly the Internet has changed over that time and so have patients’ attitudes toward it. Has that affected your business in terms of what kind of information people come to you with, or adjunctive types of information that you gather instead of just working with the physicians?Evan: The Internet, of course, has changed everything. Patients are much more sophisticated than they ever were. They know more about their diagnosis and treatment than they ever did. And, doctors will tell you, and they tell me all the time, that they've got the experience of patients coming to them with a stack of papers that they printed out on the Internet and they want to go through it.And so, to some extent the Internet has heightened both sophistication and uncertainty in the patient's mind. They're told they've got cancer and they're told there are actually five different treatments for this, and your doctor only told you about one. Your doctor might be right, but you're now wondering, why did I only hear about this one? So, it's a significant driver of why people call us, and that's true, as I said before, all over the world.In the United States, what we see that's interesting is not only is there more information available to consumers but the design of many plans is pushing responsibility onto the consumers financially to make these decisions. It’s sort of a convergence of patient responsibility and patient uncertainty that's a driver of our business.David: And then, when you talk to an employer it certainly sounds like one potential sale is an employer who has employees that have encountered this diagnostic odyssey and they see that Best Doctors would have been a much shorter path to the answer. Is there a financial return on investment just in terms of sheer medical costs? Certainly, if somebody is wandering around with the wrong diagnosis, they're racking up costs and not being productive at work.Evan: Our clients have confirmed and reported to us that they've seen substantial cost savings. EMC, for example, reported in the Wall Street Journal last year that they had saved something like a quarter million dollars in not even the first full year of the program. The cases where you see this happen where there's a surgery that was going to be done that's not necessary or appropriate or they were on the wrong course of treatment there's a lot of money spent in our system on that sort of thing, and the more you can get rid of that stuff the better it is for everybody.David: You mentioned the per member/per month, per employee/per month pricing model that you have. What is the model on the side of compensating the physicians that you're consulting with?Evan: Well, we pay them when we use them, typically on a per case basis. And then, we also have doctors that work either as employees or consultants to the company.David: And, how big and successful is the company? I see walking into your headquarters today that it looks like you're undergoing some expansion, which I think is a sign of something other than, hopefully of just chaos?Evan: Yes. We're somewhere around 250 employees. This is our corporate headquarters here in Boston, but we also have sizable offices in places like Miami, Toronto, Madrid, London and other cities. So, the company is doing pretty well.David: How is the company financed? Is it private? Is it public? Have you had outside money?Evan: We're basically privately held, and we've had a little bit of outside money over the years, as you might imagine. But, we're a profitable business, and we're living within our means.David: As you move forward, what are some of the challenges or opportunities that you see, and some of the things you're most excited about?Evan: There's enormous growth in the United States right now. There's enormous opportunity to put in a service that helps people make sure they're getting the right diagnosis and treatment. And so, we're really focused on trying to get the word out, as much as we possibly can about Best Doctors. It can help, it's easy to put in place, and please do.David: Evan, the examples that you've given are interesting, and I can certainly think of anecdotal situations like you're describing. But, how central is this issue actually? Are there really a lot of patients that are in this category? We just heard about a case where there was a misdiagnosis and something was a going to be a brain tumor, but it's actually just inflammation. Is that a one-time thing?Evan: It's a very widespread phenomenon. The experience that we have actually now matches with a lot of publicly available data that's out there. About 20 percent of people have something wrong with their diagnosis; so one in five. And, about 60 percent of people have something wrong with the proposed treatment.So it's a very large number of people who are faced with these things. And, the consequence of being wrong can be very significant because there are actually a lot of good treatments out there, so you better make sure you get it right. It's a very widespread phenomenon.David: Let's say an employee gets sick, has a bad diagnosis, or they're not sure of they're diagnosis and they want the best doctor. They find your site, Best Doctors, and their employer doesn't offer your program. Can they contract with you directly? Should they talk to their employer? What should somebody do in that circumstance?Evan: They ought to talk to their employer. We don't do a one off type of program; this is a group benefit. So, they should talk to their employer, particularly their HR folks because those are the people that we work with. Have them call us and see if there's a way we can put a program in place for the business.David: I've been speaking today with Evan Falchuk, president of Best Doctors in Boston, Massachusetts. Evan, thanks for your time today.Evan: Thank you very much.