Q&A: Aledade's CEO Farzad Mostashari on why primary care solves healthcare's costliest problem

We conducted this interview as part of our research for our latest Digital Health report, Primary Care Disruptors, which covers the changing primary care business model and how innovative healthcare entrants are utilizing high-touch, patient-centric strategies to reimagine care delivery.

New-age primary care startups are catering to today’s consumer—who wants their entire healthcare experience to be hyper-convenient and personalized—and to burned-out physicians facing unprecedented levels of pressure from the pandemic.

But not all primary care disruptors administer care themselves—some of these startups are collaborating with physicians and providing them the tech and services needed to maintain independence.

For example, Aledade partners with primary care practices to build accountable care organizations (ACOs)—groups of providers operating under a coordinated care model in which they’re responsible for the cost and quality outcomes of a patient population. The Maryland-based startup fronts the costs for technology such as data analytics and electronic health record (EHR) interfaces for its partners, and profits when the primary care practices demonstrate cost savings to insurers.

We spoke with Aledade’s co-founder and CEO, Farzad Mostashari, MD, about the main factors driving the transformation of primary care and the importance of establishing a value-based primary care culture.

The following text has been edited for brevity and clarity.

Insider Intelligence (II): What are the market factors driving so many non-traditional healthcare players to shake up the primary care status quo?

Farzad Mostashari, MD (FM): People say that every successful startup knows some secret about the world that others don't. The secret for this cohort is that when you switch the game from fee-for-service to value-based or global risk [payment] models, the most powerful entity switches from hospitals, health systems, integrated delivery systems, and academic medical centers—to primary care.

That's mind blowing, because the most powerful people in healthcare are the biggest systems that have the most market power and get the highest rates. They're the ones who win every single time—except when the test is, can you keep people out of the hospital?

Primary care—if properly supported, empowered, enabled, and incented—does [keep people out of the hospital]. The once-in-a-generation shift in payment models is what has created this opening for disruptors. And if you're a disruptor whose whole business is predicated on costs being moderated and patients having fewer hospitalizations, then you have to go upstream to primary care.

Read This With Insider Intelligence