Direct Contracting Marketplace | With Troy Reichert

Jason Crosby
Hey, everyone. I’m Jason Crosby of Strategic Healthcare Partners and your host for Beyond the Stethoscope: Vital Conversations with SHP, today we are joined by Troy Reichert, Chief Revenue Officer, and Vice President with Coral, a tech-enabled marketplace and we’re thorough platform that connects providers to those seeking their services. Troy thanks for joining us today and welcome to the podcast.

Troy Reichert
Thanks for having me, Jason.

Jason Crosby
Right. And for our audience, some background on how we’re familiar with Coral and somewhat of a disclaimer perhaps we came across Coral while working with a clinical clinically integrated network client and the Indiana market who we were assisting with rolling out a bundling strategy. And during that time, we in the practice is found the platform very user friendly and just another mechanism that allowed the provider to interact and engage with the market. And so that’s how we came and crossed paths probably a few years ago, I’d say now, but what that let’s jump right into the conversation. Troy as we get started, tell us more, some background about Coral and the problem that you guys are trying to solve.

Troy Reichert
Yes, absolutely. So Coral actually started about six years ago and it was the result of a conversation between very well-known surgeon and a TPA. They were literally 2 miles apart. They were doing tons of business in terms of direct contracting together. But the challenge they had was literally the communication. So, they were phone, fax and e-mail like so many doctors, offices and surgery centers are doing, and they were having trouble. Larry, how do we handle the volume?
And out of that birth Coral where, you know, the founder of art company Greg Smith said, I can solve that problem with technology and so literally Coral is the communication platform between what we call payers and providers to help remove the transactional friction and make it easy for everybody to do business together.

Jason Crosby
Very good. Makes sense. Makes sense. So, who as you met on the provider side? Who would you say is the ideal target? Who? Who’s that? A user typically of the platform.

Troy Reichert
Certainly, we started with surgery centers, independent surgery centers are the core of you know the provider base today. Six years later, Coral has, if you think about sort of the boundary conditions of primary care on the left and emergency care on the right, everything in between those two points is what sits on Coral now. So, we have labs and radiology at the beginning of a point, an episode of care.
All the way through all the specialists and ending with physical therapy and everything in between, including behavioral health. So, all of that is on Coral. And the key for all of these providers is that number one, they understand their costs #2 they want to offer a guaranteed price for a specific service. So, they don’t, they have any mindset of a charge master. They are basically what we consider a cost plus they understand their cost.
They have to add some margin to be profitable and that then becomes the price that they charge to our clients.

Jason Crosby
What are you typically see given that breakdown there, what are you seeing mostly in that client base of yours in terms of that knowledge to get up and go on, whether it’s knowledge of the charge master versus cost plus, what’s some generic benchmark around that from what you’re seeing?

Troy Reichert
Well, certainly these uh doctors and the surgeons and surgery centers, they have to know their business. These are very smart people, not only from a medical standpoint but from a business standpoint. You can’t give someone a price without knowing what your cost is.
And so, these doctors, these surgery centers, they know what their cost of doing business is when they do a, you know, gallbladder surgery, they know it’s X dollars to do that to actually open their doors, pay for all the personnel, pay for the all the pieces they need and have a margin on there. When they do a total knee replacement, they know the same thing. So, number one, these doctors, these surgeons, these surgery centers, understand their costs. Becker’s Hospital Review says that.
Nine out of 10 hospital CEO and CFO’s don’t know their cost of doing business. That’s why literally they have to hide behind the charge master because there’s so much fluff in there that they that’s how they do it. My surgeon, my surgery centers, my hospitals, they understand their costs and they can give me a price above that which makes them profitable. But at the same time saving the plan, money, saving the employee money and paying the doctors more.
How that works, we called the triple play, but it does.

Jason Crosby
Fantastic. Well, there’s obviously a knowledge gain there with the platform on behalf of the provider and ultimately the patient you mentioned earlier about the relationships and how that was a big reason, how poorly even get started. And obviously building relationships and in today’s healthcare industries can be an issue.
So, what have you seen so far and how the platform and just the process behind Coral has allowed relationships and communication to improve between providers? You mentioned the spectrum there between primary care and specialist or whether it’s between provider and employer, provider, payer, etcetera. Speak to that for a moment.

Troy Reichert
Absolutely, Jason. And I think that’s literally one of the biggest issues that we face in healthcare today is that word that you just use relationships, we have a middleman in the health care business that is literally controlling both sides of the relationship. And my goal with direct contracts is to literally move out that third party, get out the middleman out of the way so that the payers.
And the providers can contract business together, can conduct business together. When you have a direct relationship with somebody, you have a different relationship. You have literally a different set of circumstances, agreements, understandings, assumptions that you are now doing business together.
When you put in a third party, when you put in a middleman in the middle of all that, it’s the middleman that filters everything. It’s the middleman that controls both sides, and that’s not good for health care. We need to put the doctors back in charge of medicine. We need to put the payers back in charge of, you know, that relationship, what they’re gonna pay and knowing what they’re going to pay. So it just elevates that relationship to a whole new status where it should be so that people can talk to each other.
The doctors, the payers and the providers and the patients all around the same wavelength, they’re on the same understanding. They have the same incentives. That’s another part, the perverse incentives that are in the healthcare today. We’re taking out those perverse incentives in a direct relationship.

Jason Crosby
Let’s keep going on that path. So, we talked about direct contracting and what we were familiar with you guys was long and some bundling models, you know that were being rolled out.
Let’s step back for a second and kind of talk to what those things are specifically, what’s up? What’s it look like in today’s world? You know, if you want to talk about what’s a, what does a bundled surgical procedure look like and maybe educate our audience a little bit for those that aren’t familiar with that.

Troy Reichert
Yes, absolutely. Every day we’re working with bundles. Everyone of us with, whether we go to a fast food restaurant in order, you know, the happy meal, the, the Big Mac deal or we get our bundled services from our cable provider that include cable, Internet and phone, it’s a bundle, a bundle creates efficiencies and in the same way with healthcare, when we put together a bundle in healthcare, it creates efficiency. So, a bundle in the surgical sense is the surgeon.
The facility and the anesthesiologist at the minimum. It requires that those three pieces are the same. Well, any of us that have ever gone to have a medical procedure done the surgery, we know what happened. We haven’t done. We don’t know the price. And you know, three weeks, 5 weeks, six weeks later, we start getting all these EOBs all these explanation of benefits and every one of them says it was very expensive and guess what? We owe money to every one of them.
In my world with a bundle, the patient gets one EOB. And unless it’s an HSA plan at the bottom, it says you owe 0. Because the Members are given the incentive of the zero out of pocket. And so, because the bundle, because of the cost savings, because of the efficiencies were able to actually give them the better care, the direct relationship at a lower price, the plans that our primary customers are self-funded medical plans. But the plans are saving money, they’re sharing a portion of that savings with the member in terms of 0 out of pocket. So that’s why we say you know the plan wins because it’s paying out less money why the patient wins because there’s zero out of pocket.
And again, because of the financial construct of the bundle, the doctors and surgeons are actually making more money than they would, you know, the fee for service models.

Jason Crosby
Fantastic. OK, now let’s drill in a little bit here. You guys have a pretty expansive client base. Let’s talk about that for a moment. And then as far as the types of clients you have specialties, ASCs, et cetera, you know maybe geographically what the typical ideal client, let’s get a little bit granular there because I want to also hear about some success stories, right, where is Coral really because as you mentioned it’s a platform that helps tie in relationships and expands on knowledge based off cost containment type initiative. Speak to let’s give it a little granular there and speak to your client basically success stories.

Troy Reichert
Yeah. So, we have providers in 49 states. We don’t have any providers in Hawaii, but we’ve got providers in every state. And again, there are all the specialists that you that I described before. And so, these specialists are looking for access and service respects to a different type of patient. My patients are three types of patients. They’re self-funded medical plans and they’re indemnity, medical plans. And the third one, they’re cost or the sharing ministries.
The shearing organizations, those are the three customers that are the payers on the system. So inside of Coral is the payers and the providers that come together and again in all over the country we have providers. We have over 10 million lives that are on the system to have access to Coral done by 85 TPA’s all the major Med management companies, nurse navigator companies use Coral. So, we’re trying to give the patients.
And access to a new tile type, a new breed, if you will, of provider who has said I’ve got your best interest in mind and I’m gonna give you a fair and transparent price. That’s the model.

Jason Crosby
Well, there, that’s a pretty expansive client base, obviously, to tap into. What are you seeing are as a practice comes to Coral for help. What is oftentimes the reason they’re specifying why you’re there and then subsequently, what’s that implementation look like once they acknowledge that, OK, this platform can help us with the reasons we’ve probably have already discussed. What’s that look like on their end and a typical, you know, practice or ASC setting?

Troy Reichert
Yes. And certainly, you know the ASC’s and the doctors and surgeons, they’re coming to Coral for a variety of reasons and motives. But we’re finding one of the most important ones is again that relationship. As you watch the hospital systems buying up and owning the doctors, you see PE money coming into the industry as you see what control the BLUACHs, Blue Cross, United, Aetna, Cigna, Humana, are having over the doctors they are looking for options. They’re looking for a change that they can be in control of, and literally direct contracts is that option for them. And so, as an alternative, they want to be in relationship with independent TPAs with corporations.
Uh, with that, you know, 50 million plumbing group so that they know that they’re going to see their patients. And so, the providers are looking for again that different type of relationship where they have a lot more control. Secondly, it’s very easy for these providers to come online to Coral, the Coral platform. If an individual can work inside of e-mail, they can learn you work inside of Coral. That’s how simple it is. Again, we have tried to make this system so easy, so.
User-friendly that anybody in their office can use it, typically in the office, in the doctor’s office and the practice and the surgery center, it’s the scheduling person that uses Coral and it’s the billing person that uses Coral and we understand there’s a lot of change over at the receptionist desk at the scheduling desk. So again, Coral has to be easy in terms of the ability desk, I’ll share a great story. One of our highest volume surgery center.
Uh, before Coral they were doing about 300 direct contract procedures a month. Today they’re doing over 800 a month before quarrel. They had three people working full time managing all their direct contracts or managing those episodes of care. Today, that same surgery center again over double over 800 procedures every month. They’ve got one person working 3 hours a week.
That’s the efficiency the Coral brings to a provider. And so if a provider wants to get into the direct relationship, direct contract business, they can literally manage that inside of Coral. It’s very easy and they’re in control of everything. They’re in control of their bundle. They’re in control of their components. They’re in control of their price.
That’s something that you know again when you get a network contract laid in front of you as a provider, there’s two things in there that’s in their contract is not in mind. It’s called time and it’s called money. My contract has no time limit. So if they are friend fed up, don’t see the value, don’t want to do it, they can get off tomorrow if they have a for orthopedic surgeon, if they have a striker increase for a knee implant, they can change that bundle in the in the system today and that’s the new price tomorrow.
So, they have ultimate control over their bundles and in in essence over who they wanted to do business with.

Jason Crosby
Fantastic. Well you, you certainly provide some really good, applicable informative insight into the practice there for the folks that are listening. If they want to find out more, how can they find out something formation about you or Coral?

Troy Reichert
Yeah. So, Sir, we have a website, Coral.IO. So, we love to talk to people. We love to show it. We can do it demo in about 15 minutes of the platform. And literally we show you the communication process between the payers and the providers, how that works, how that looks. We have about 400 navigators either inside of the TPA inside the indemnity plan or in the Med management companies that work to learn steer and feed patients into the surgery centers that’s into these specialists.
So, but again, we showed that in a demo and that relationship between the two and how it works.

Jason Crosby
Really appreciate your time and joining us today.

Troy Reichert
Absolutely. Thanks for having me, Jason.

Jason Crosby
Right. And thank you. We look forward to our next podcast and until then have a great rest of your day.