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A top exec at the $12.7 billion insurance startup Devoted Health shares the key ingredients for transforming American healthcare and what's standing in the way of faster progress

Dr. Neil Wagle
Dr. Neil Wagle, the chief medical officer of Devoted Health. Devoted Health

  • Dr. Neil Wagle is designing a new model of healthcare at Devoted Health, a $12.7 billion startup.
  • In an interview, he identified keys to building a successful value-based-care organization.
  • He said experienced clinicians and tech are essential but consolidation hinders industry progress.
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Dr. Neil Wagle knows a thing or two about transforming healthcare.

Wagle, an internal-medicine physician by training, spent six years at Partners Healthcare (now Mass General Brigham) leading the health system's efforts to improve the quality of care for patients.

In 2017, he joined Devoted Health, a $12.7 billion health-insurance startup. As its chief medical officer, he's spearheading the development of a model of care aimed at improving the health of older Americans by getting them the right care at the right time while saving costs for the US healthcare system. Wagle, who is 40, was selected for Insider's list of 30 leaders under 40 transforming healthcare in 2022.

People who enroll in Devoted's Medicare Advantage plans can keep their primary-care doctors. But the startup's in-house medical group, Devoted Medical, provides extra services to treat people with diabetes, heart failure, and other chronic illnesses, or those who just returned home from a hospital visit, in their homes or virtually.

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The idea is that by providing those additional services — at no cost to the member — Devoted can keep patients healthier and out of the hospital, allowing the health plan to avoid the $15,000 to $20,000 cost of the hospital visit, Wagle said.

Devoted is growing fast and expanding in the US. It covers about 80,000 people, the company confirmed, which is about double its health-plan membership from a year ago. Wagle said Devoted Medical, which employs 400 providers and other staffers, plans to employ about 1,000 people by January as it treats more members.

"What is exciting to me is that if this works — which, it is working — and we do it at scale, we can not only transform healthcare in this country — it actually solves all three of the current healthcare crises," Wagle said, referring to growing healthcare costs, provider burnout, and inadequate care for aging Americans.

In an interview with Insider, Wagle outlined the key ingredients for transforming healthcare and why startups, not industry incumbents, will be the ones to get the job done.

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Wagle said that having experienced clinicians passionate about caring for patients and having the right supporting technology is essential to succeed in a new payment model — but consolidation among big health systems, many of which still get paid in traditional ways, is a major roadblock to sweeping change.

Transforming healthcare requires the right people and technology

Wagle said Devoted so far has been successful because of two key factors: the people it hires and the way it deploys its homegrown software.

Wagle said Devoted hires clinicians based on clinical experience (the average clinician has eight years of experience, he said) and the "love in your heart." He acknowledged it sounds cheesy, but the goal is to create a workforce passionate about taking care of older Americans.

That workforce must be supported by great technology but not overwhelmed by it. Wagle said Devoted's electronic medical record, built from scratch, is meant to make its clinicians' jobs as easy and effective as possible.

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He said that while some technology platforms inundate clinicians with reminders to perform tasks such as screening for depression or submitting billing codes, "with our providers we say: Don't remember anything. Emote, connect, feel, and software will remember everything for you, so you can focus on practicing your craft, on making that connection."

"And it's really that connection that allows these great clinical and financial results," he added.

Old habits and healthcare consolidation are big barriers to progress

Many attempts to improve healthcare by changing the way it's financed have failed.

Part of the problem, Wagle said, is that altering the behavior of clinicians who have long been paid one way is challenging.

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Traditionally, healthcare providers have been paid a fee for every service or test they provide, known as "fee for service." The more they did, the more they were paid, regardless of whether the person's health improved.

"There is a generation of providers who have grown up in the hamster-wheel world, and turning that system is very, very difficult," he said.

Changing behavior becomes even more difficult when a healthcare organization accepts "value-based payments" for some patients and traditional payments for others. Wagle said clinicians aren't built to change how they act from one patient to the next.

He said one of the biggest threats to healthcare transformation is rampant consolidation in the industry. Big health systems are merging and snapping up physician practices, driving up healthcare costs for Americans.

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"The more it consolidates, the more the behavior patterns shift towards these sort of big systems that are largely operating fee-for-service," Wagle said. "The most rapid progress will happen from new entrants rather than incumbents."

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