With a trailblazing career that includes founding and selling the first Value-Based Care health system in the U.S. for $132 million, Tom has been a driving force in guiding healthcare organizations to transition to and thrive in Value-Based Care. His expertise as an independent consultant and his unwavering commitment to transforming care delivery align seamlessly with Seed Healthcare’s mission to disrupt the industry, promote early detection, and improve healthcare outcomes.

We recently got to sit down with Tom to discuss his insights on joining Seed, his perspective on Value-Based Care, and how his extensive experience will help advance our vision for healthcare innovation.

You’ve been recognized as a pioneer in Value-Based Care, founding and selling the first Value-Based Care health system in the US, Patients First Healthcare, for $132 million. What inspired you to take this groundbreaking step in healthcare delivery?

In 1995, my partners and I were among the first signatories of the very first total-risk Medicare Advantage-type contract in the country. We grew that single contract into our own health system, which we sold to a regional health system back when $132 million was a lot of money. During that journey, I learned two things: aligning incentives bends the cost curve and practicing with autonomy is a joy, especially for the patients. As a physician, I feel a great responsibility to spread the word on how to execute the model successfully.

Transitioning to Value-Based Care is a major challenge for many organizations. What were the key factors that enabled you to successfully build and sell your health system?

We were nimble, we were the owners, and we were without the huge legacy costs incumbent health system carry. As physicians, we were forced to always keep the patients first (hence our name.) Most importantly of all, we weren’t afraid to fail.

As a healthcare entrepreneur, investor, and advisor, what common challenges do you see across organizations transitioning to Value-Based Care, and how do you recommend overcoming them?

The greatest barrier is mindset. The pivot to VBC requires vision, strong leadership, and a future orientation, the very characteristics bred out of the current leaders in our staid, captured, and consolidated industry. VBC is the polar-opposite of FFS. Most leaders believe the pivot can be gamed without disruption. Such delusional thinking is why so many health systems are so far behind the curve. The remedies are education, incubator sites within organizations, and the preparation of board and staff alike as to the change coming. Start with noting that the under FFS, revenue cycles are 2-6 weeks. Under VBC, they are 12-21 months. Few systems are ready for such a change.

You’ve consulted with PE and LP firms as well as with FLPs. How have these early experiences influenced your approach to healthcare strategy and innovation?

I continue be astonished at how easily experienced, intelligent, and wealthy people throw their resources behind investments they do not understand. Most of my engagements have been advising against such allocations because their story is flawed- Medicare Advantage Organizations, Accountable Care Organizations, Direct Contracting Entities, vendors of supportive services. I’ve seen billions evaporate, usually against my advice. On paper, they should print money. Operationally, it takes a unicorn to meet such expectations. Fortunately, they are out there. And when you know what they look like, identifying them is straightforward.

The mission of Seed Healthcare to disrupt healthcare through innovative technologies, especially in early disease detection, complements your focus on aligning clinical and payor interests. What excites you most about this mission?

As a physician, the benefit to the health of the patient is clearly first on the list. But more than that, while under FFS healthy patients are a financial loser, under VBC such technologies are aligned with the payment model. The cap rate for a deceased patient is zero. Keep your patient healthy and away from healthcare and you’ve essentially created a subscription model for the entire population. And it’s a sustainable model where everyone, especially the patient, benefits.

As an advocate for aligning clinical and payor interests, what do you see as the biggest opportunities for Seed Healthcare to drive innovation and collaboration in this space?

CMS’ upcoming mandated pivot to universal VBC is the driver of change. The trillion dollars of Medicare and Medicaid funding is going to be redirected to those who can actually deliver value. And it’s not a single bet. Even in the unlikely event CMS backs off, the pivot will happen. There is a recognition that the nation has reached a limit on how much wealth it can spend for these sevices. Though there is a lot of ruin in a country, what can’t go on, wont. And Fee-For-Service as a payment model won’t.

As a member of Seed Healthcare’s Advisory Board, how do you envision leveraging your expertise in Value-Based Care, pharmacy benefit management, and healthcare strategy to help Seed achieve its vision of transforming healthcare?

Experience has taught what works conceptually often doesn’t do so in practice. Visibility of those differences is of immense value. Similarly, understanding how a provider who has skin in the game thinks and acts is a unique perspective that is also essential for assessing opportunities. Unfortunately, the consolidation and capture of healthcare delivery has wrung out every last vestige of innovation in leadership. In such a world, a physician with a life of envisioning, executing, and reaping the benefits of such paths moves the needle like nothing else.