Remedy Partners CEO On Thriving In The Weeds Of Healthcare

Chris Garcia, CEO of Remedy Partners, got his first taste of running a company in the 1990s when he ran a company focused on managing care for work-related injuries on behalf of property and casualty insurers. After selling that business in the early 2000s, he spent the next eight years working in private equity at Charterhouse Group, leading investments into healthcare services firms. Throughout this time, the itch to run a company never left.

“I realized that I really enjoyed operating. When you’re investing in businesses, even if you’re on the board or you’re executive chairman, you actually don’t get to pull the strings every day. And I found that I really enjoyed doing that,” he says.

That’s when he ran into Steve Wiggins, founder of Remedy Partners, which provides software and services to support bundled payment stakeholders, such as payers, employers, and at-risk providers. After a decade of healthcare investments, Garcia said he felt the idea for Remedy was truly fresh and different from what he seen.  “You can invest in only so many home health businesses, so many population health businesses, so many pharmaceutical management businesses, radiology management businesses, etc. This was a truly brand new idea.”

The only problem? His private equity firm couldn’t justify an investment because at the time, in 2012, it was too early stage. Thus, he left the private equity firm, helped Wiggins raise money for the first round of investments, and became its CEO. Garcia spoke to Chief Executive about his accomplishments as CEO of Remedy, the challenges facing him in a complicated healthcare industry, and more. Below are excerpts from this interview.

Talk to me about what you’ve accomplished at Remedy.

I started it from scratch with Steve. Before I got here, there were a few guys sort of floating around, but once we raised the capital we were actually able to hire people and really go after this bundled payment opportunity that the government had presented the market. And five and a half years later, we’ve got just under 400 employees, three offices, and we cover almost every state in the Union, there maybe two or three that we haven’t quite covered yet.

They call us a convener, [as] we stand between providers and the government, helping them participate in [bundled payment] programs together. And we became the largest convener over that period of time, managing over half of the current [Medicare Bundled Payments for Care Improvement (BPCI)]. We manage about half of that program as it exists today, and we have a very large subscription for the successor program which starts on October 1st of this year.

And then we’ve taken [our successes from the Medicare program] and we’re now beginning to implement bundled payment strategies in the commercial space… commercial insurers with this traditional insurance population are starting to talk about wanting to explore bundled payments and how they can reduce costs and improve outcomes. Self-insured employers want to talk about it too.

What opportunities do you see with the changing reimbursement models that are taking place in healthcare?

Well, I think that the healthcare world has sort of thrived around fee for service, right? And fee for service sort of drives that idea about volume. If you cut my rate, I’ll treat you more. Now the conversation has begun to shift to utilization. It’s not like it hasn’t been thought up before, it’s just we’re finally getting around to reforming how we pay for things. The interesting impact is from a financial aspect, is it sort of putting the patient back in the center.

“…the nuances of this business are quite significant. It’s hard. It’s hard what we do.”

The patient has kind of been removed from the center of the equation and it was all about reimbursement and how [you] manipulate the system and get the most financial reward. And now, if you’re paying for value, if you’re paying for outcomes, all of a sudden, the patient comes back in the middle and you are concerned about what that patient has to say and what that patient is experiencing. Because at the end of the day, if that patient doesn’t believe they had a positive outcome, that is going to hurt the providers in terms of their reimbursement. So, there’s sort of objective and subjective outcomes, and both of those will matter in this new reimbursement scheme.

Historically, providers very often treated to the benefit rather than treating to the condition…hospitals typically didn’t know what happened when a patient left their four walls…they didn’t know that if you look at the spending of a patient during a 90-day episode of care, only one-third of the spending is being done in the hospital. And then when you explain to them the impact that their decisions have on that two-thirds of the spending, the majority of the market said, “Well, we can do better. We have to do better.”

When you hold a hospital accountable and you hold its reimbursement in purgatory, if you will, until there is an improved patient outcome, now the hospital has a different financial incentive. Now they actually care about where that patient goes and how much care that patient receives when they leave the hospital. Those are really important sea changes in healthcare that haven’t or they’ve been talked about a lot, but we’ve never found a mechanism to make them happen until now.

What are the big challenges you face as CEO in this new healthcare environment?

Well, I mean, I think the biggest challenge it’s just getting folks to change. It’s hard to change. They’ve been operating under the [old] system for quite some time and they’ve perfected their techniques in how to operate and how to survive in that reimbursement market. And so it’s a little bit like turning an aircraft carrier. It takes time. It takes patience. It takes continual reinforcement with data and people. So, I’d say that’s the biggest challenge.

I think also getting providers, individual physician providers to engage as well is a big challenge. One of the benefits of this [new] process is aligning physician specialists with the acute-care partners where these patients are being discharged from. I think that’s been a very important connection point, and they now have a reason to connect and participate together, and together they can create a better outcome and enjoy a better financial incentive for having done that. But it’s not natural, right? These guys have been apart for quite some time.

And the nuances of this business are quite significant. It’s hard. It’s hard what we do. It’s hard to develop fair and reasonable target prices in a bundled approach for taking care of all the different complexities that these patients display. Remember, we’re not talking about a 25-year-old softball player. We’re talking about an 80-year-old, a 90-year-old with multiple co-morbidities. So you’re trying to find pricing that takes into account all of the patient’s complications and acuities and at the same time, being able to hold people accountable for managing all of those different conditions. It’s challenging.

You can’t just be that mechanic that says, “Oh, you asked me to replace a tire, so I replaced the tire. I saw that the front door was falling off, but you didn’t ask me to do that. You just asked me to fix the tire.” Now, we’re saying, “Hey, take care of the car. Fix the car. I want to drive the car. I want to drive from point A to point B. Give me a car that works.”

How has your leadership style has evolved over the years and how do you see yourself now as CEO of Remedy Partners?

Leadership is a learned activity. You learn and you discover things, you discover how things are accomplished. You hope that you had good role models in your life, and fortunately, I have. And importantly, when I invested in companies that were successful and I watched how successful CEOs manage their businesses, it reinforced a lot of things that I thought about when I was CEO of my first company. I was a first-time CEO who had started a new business from scratch. So, there’s a lot to learn there. You make mistakes, for sure, and the only thing you can ask of yourself is to try to learn from them and not repeat them.

“If I could stress anything, I think reacting quickly to change is really, really important. And I think if I’ve learned anything over my duration, it’s reacting quickly.”

And when I was on the investing side and I was on the board, one of the things I thought about consciously and I talked to my CEOs about was, “Hey, one of the things I can help you with is trying to have you not make the same mistake I did, to maybe avoid a pothole or two along the way.” And I think folks appreciated that because it’s always good to have another set of eyes looking and listening. And so I think as I get here with Remedy, I mean, it was another build from scratch. CEOs come in a couple different varieties. I like building. I like getting my hands dirty. I like being deep in the details. I like being involved. When you’re building companies and you’re trying to recruit and retain folks, I think staff truly appreciates when the executives of the company are actually doing stuff and are actually involved in the details.

It’s the culture that differentiates these companies and I think it starts with our executive team here and the fact that we are engaged and involved and in the weeds and working every day. We don’t have big staff supporting us. I think people see that and understand that. I think that first-time folks, maybe if this is their first job, they might not appreciate it so much, but they will when they go to their next company. They might walk into a big company and say, “Hey, I’ve never met the executive. I don’t even know if that guy knows who I am or what I do or what we do.” And so you create these cultures around what your company needs to be successful, and for us, I think, it’s really paying attention to the details, understanding what our staff, what the needs are of our company and reacting quickly.

If I could stress anything, I think reacting quickly to change is really, really important. And I think if I’ve learned anything over my duration, it’s reacting quickly. “Okay, we got a problem. Boom, let’s fix it. What’s next? Got another issue? Let’s fix it. What’s next?” My personal slogan is, “Get [stuff] done.” I’ve got coffee mugs, I’ve got memo paper that the employees have given me over time, and it’s always got that at the heading. And so that’s sort of the theme here, is get stuff done.

Read more: A Healthcare CEO’s Letter To His Old Silicon Valley Self